Chinese consumption, manufacturing-related stocks rally on policy support, work resumptions
Published: Jun 01, 2022 02:36 PM
Workers weld at a workshop of an automobile manufacturing enterprise in Qingzhou city, East China's Shandong Province. Photo: Xinhua

Workers weld at a workshop of an automobile manufacturing enterprise in Qingzhou city, East China's Shandong Province. Photo: Xinhua

Chinese stocks related to the high-end manufacturing, shipping, auto and tourism sectors rallied on Wednesday morning, with some shares surging by the daily limit of 10 percent, as businesses and investors embrace positive signs on multiple fronts, including the reopening of Shanghai, major stabilization measures as well as upcoming holidays.

Among the major indexes, the ChiNext Index, tracking the NASDAQ-style board of growth firms, gained 0.99 percent on Wednesday, while the Shenzhen Component Index was up 0.21 percent. The Shanghai Composite Index was down 0.13 percent.

Stocks in the optical electronic and consumption electronic sector, including Shaanxi Lighte Optoelectronics Material Co, Costar Group Co and Guoguang Electric Company, rose to the daily limit of 10 percent on Wednesday. 

In the port shipping sector, shares of China Merchants Energy Shipping Co and Xiamen Port Development Co also surged by the daily limit. Share prices of Jiangsu Lianyungang Port Co and Nanjing Tanker Corporation saw significantly surge as well.

Shanghai, China's high-end manufacturing center and international transport hub, was officially reopened on Wednesday after a two-month battle against COVID-19 with full resumption of local industries, businesses and public transport. 

China's State Council, the cabinet on Tuesday revealed 33 targeted measures to stabilize various aspects of the Chinese economy, including consumption, investment and industrial and supply chains. The measures, coupled with the easing of the epidemic situation in the country, is expected to ensure a major rebound in the third quarter. 

The measures include taxes cuts on vehicle and home appliance purchases. For example, purchase taxes will be halved for cars pricing under 300,000 yuan and with less than 2.0 litres of engine buying in the latter half of 2022.

Stocks in sectors such as auto manufacturing, auto component and intelligent driving sectors witnessed sharply rises on Wednesday. 

Stocks of a number of domestic carmakers, including SAIC Motor Corporation, Great Wall Motor Company and Chongqing Changan Automobile Company, saw significantly rise. DongFeng Automobile Co rose by 10 percent to its daily limit. 

The China Association of Automobile Manufacturers predicted on Wednesday that the tax cut may promote the sales of over two million vehicles and realize over 300 billion yuan ($44.89 billion) in sales revenue.

The coming of Duanwu Festival holiday, also known as the Dragon Boat Festival, and lifted cross-provinces travel ban contributed to the surges of tourism stocks on Wednesday morning. Dalian Sunasia Tourism Holding Co surged by the daily limit in the morning. Anhui Jiuhuashan Tourism Development Co has seen a 4 percent surge. 

Global Times