A woman with a facial mask passes the New York Stock Exchange (NYSE) on February 3, 2020 at Wall Street in New York City. Photo:AFP

Chinese mainland shares proved exceptionally strong on Monday on the back of a slew of pro-growth policy announcements over the weekend. 

The benchmark Shanghai Composite Index edged down 0.28 percent, or 8.44 points, to end at 3,031,23 points, while the Shenzhen Component Index climbed up 1.23 percent, or 142.68 points to 11,772.38 points. The ChiNext index rallied 1.68 percent, or 37.33 points, to close at 2,263.97 points. 

Nearly 60 percent of stocks traded on the A-share market closed up. 5G and semiconductor shares led Monday's gains and over 150 stocks surged by their daily limit. The daily trading volume hit more than 1.2 trillion yuan ($170.61 billion) on Monday, the highest level since November 2015. It marked the fourth trading day in a row that the daily trading volume outnumbers 1 trillion yuan.

This stood in stark contrast with poor performance across global markets amid fears of the fast-spreading epidemic outside China. 

Other than Japan's markets which were closed for a holiday, Asian markets, notably South Korea where infection numbers soared to 833 posted big losses.

European markets also opened considerably lower on Monday, with Italy, the largest focus of COVID-19 infections outside Asia with more than 200 cases was among the poorest performers. 

In the US, where 35 cases of the disease have been confirmed, prompting health authorities to prepare for a possible pandemic, fears over the virus are weighing on investor sentiment. 

The question then arises: Can A shares extend their stellar performance and help pull global markets out of a sellout?

It seems that mainland stocks at large might be poised for a downward spiral in the days to come while technology stocks that have yet to post stunning gains would continue moving up. 

Notably, CITIC Securities, the largest brokerage in China, warned over the weekend that momentum behind the first round of a "trough filling" rally this year is waning and the markets are set to enter a period of calm before embracing a second rally in the second quarter. 

The warning has the markets expecting a reversal to the risk rally. In another sign, net outflows via the northbound trading linkups totaled nearly 6 billion yuan on Monday.

Now all focus is on whether US stocks will become mired in sharp losses and whether mainland shocks can continue to defy expectations for downward swings.

Global Times