In a remarkable turn of events, the Shanghai Composite Index surged by 8.06% to close at 3,336, while the Shenzhen Component soared by 10.67% to 10,530 on Monday. This surge marks the largest single-day gain for Chinese stocks since 2008, driven by a comprehensive stimulus package from Beijing that has drawn foreign, institutional, and retail investors back into the market amid concerns of missing out.
The benchmark indexes achieved their highest levels in a year and have risen over 20% from the lows experienced in Stember. In an effort to stabilize the struggling property market, China has taken decisive measures, relaxing rules for homebuyers and reducing mortgage rates.
Additionally, the People’s Bank of China (PBOC) recently slashed banks’ reserve requirement ratio by 50 basis points and lowered key medium- and short-term borrowing rates to enhance liquidity and encourage lending.
Noteworthy performances were recorded among heavyweight firms, with East Money Info jumping 20%, Kweichow Moutai rising 7.3%, Citic Securities climbing 10%, Contemporary Amperex increasing 11.1%, and Ping An Insurance growing 10%.
It is important to note that Chinese markets will be closed from October 1 to 7 for the National Day holidays.
Looking ahead, the Shanghai index has risen 362 points or 12.15% since the start of 2024, as evidenced by trading in a contract for difference (CFD) that tracks this benchmark. Analysts predict that the China Shanghai Composite Stock Market Index will trade at 3,255.42 points by the end of this quarter, with projections indicating a potential decline to 3,023.87 in the next 12 months.