Traders work at New York Stock Exchange in New York, the United States, Jan. 31, 2020. (Xinhua/Wang Ying)

 
Chinese mainland shares rallied on Thursday on hopes for greater policy support to steady the economy amid the deadly coronavirus outbreak, shaking off mild losses in the previous session. 

The flagship Shanghai Composite index soared above the key 3,000-point level. Both the Shenzhen Component index and the tech-heavy ChiNext index gained over 2 percent.

Securities shares led the rally and a range of sectors posted strong gains.

Nearly 3,200 out of over 3,700 stocks traded on the A-share market finished up, indicating a revival following Wednesday’s mild losses.

Daily trading volume on the mainland market exceeded 1 trillion yuan ($142.53 billion) for the second day in a row, almost twice the average for 2019.

The boisterous trade came on the back of signs that the disease is being contained, and massive monetary and fiscal support will be in the pipeline to shore up the economy. 

By Wednesday, new confirmed infections outside of Hubei, the center of the epidemic, fell for the 16th consecutive day, showed data from the National Health Commission. 

In a move in line with market expectations, the People’s Bank of China, the country’s central bank, announced plans on Thursday to cut the benchmark loan prime rate. The move, which lowers financing costs, is arguably good news for especially virus-hit businesses. 

Businesses with operations related to epidemic control will be put on the fast track if they file for an IPO on the STAR market in Shanghai, the financial regulatory authorities in Shanghai announced on Thursday. 

All this would bode well for US stocks, which have continued a bull run that has some investors worrying whether the market is nearing an inflection point. Both the NASDAQ and S&P 500 closed at fresh records on Wednesday.

The unprecedented bull run in the market seems to have pre-loaded future gains as measured by company earnings, stoking fears that it might all end some day.

But with mainland stocks, particularly the ChiNext market that had gained over 20 percent this year as of Thursday, suggesting it has technically entered a bull run, the markets across the Pacific will likely continue an upward spiral.

Global Times