SOURCE / ECONOMY
Chinese stock markets climb above 1% following US market surge upon Biden entering office
Published: Jan 21, 2021 12:28 PM

Shenzhen Stock Exchange in Shenzhen, south China's Guangdong Province Photo: Xinhua



Chinese as well as other Asian stock markets rallied on Thursday morning, following US stocks' surge to new historic highs on Biden's inauguration day. Experts said that investment sentiment was driven higher as they saw Biden's policies as sending a more "humanitarian and cooperative" message than his predecessor. 

By the end of the morning trading session, the Shanghai Composite Index rose 46 points, or 1.3 percent, to 3,629.61 points. The Shenzhen market edged up by 1.85 percent to 15,505.29 points, while the tech-heavy ChiNext market rose by 2.24 percent to 3,276.57 points. Non-ferrous metals, rare-earth and medical shares led the rally.

During morning trading session, Hong Kong's Hang Seng Index also surged above the mark of 30,000 points, the first time since May 2019. 

Other Asian stock markets also underwent a rallying, though not significantly, on Thursday morning. Japan's Nikkei 225 index rose by 0.72 percent as of 11:34 am, while South Korea's Korea Composite Stock Price Index (KOSPI) rose by 0.84 percent. 

Major US stocks surged to new highs on Wednesday as Joe Biden became the 46th president of the US. The Dow Jones Industrial Average gained more than 257 points to finish at 31,188.38; the S&P 500 closed up more than 1.39 percent at 3,851.85, while the tech-heavy Nasdaq Composite Index finished the session more than 260 points or 1.97 percent higher.

Li Daxiao, chief economist at Shenzhen-based Yingda Securities, said that the markets had worried whether the transfer of US presidency would take place without disruption, but now that everything has appeared to settle down, markets would respond.  

The Biden administration has released a set of policies sending positive signals its policy settings wouldn't be as rigid and belligerent as those adopted by the Trump administration. For example, Biden has set a more friendly policy for international students, many of whom are Chinese, by increasing the number of visas for permanent immigration and exempting certain graduates from any cap. 

"What Biden has done is making the market believe that he will not target China and other countries as harshly as Donald Trump did. This also created confidence and anticipation into the capital markets and drove the stock markets higher," Li told the Global Times. 

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