stock market Photo:VCG

China's stock market rallied on Thursday after an eight-day holiday, as the benchmark Shanghai Composite Index surpassed the 3,900-point mark for the first time in a decade. Observers said that this development reflects positive market sentiment that is boosted by consistent investor enthusiasm in the A-share market.

The index has shot up by more than 28 percent since April 7, with a year-to-date cumulative rise of 16 percent, making it one of the standout among global capital markets.

The Shanghai Composite Index closed at 3,933.97 on Thursday, up 1.32 percent, while the Shenzhen Component Index and the Nasdaq-style ChiNext Index rose by 1.47 percent and 0.73 percent, respectively. Thursday was the first trading day after the eight-day-long National Day and Mid-Autumn Festival holiday.

Industrial sectors such as non-ferrous metals, nuclear power, and rare-earth magnets led the rally. The combined trading volume of the Shanghai and Shenzhen bourses on Thursday reached 2.65 trillion yuan ($373.65 billion), up 471.8 billion yuan compared with the previous trading day. The trading volume exceeded 1 trillion yuan for the 91st consecutive trading day.

Yang Delong, chief economist at First Seafront Fund, told the Global Times on Thursday that the extended gains on the Shanghai and Shenzhen bourses have been partly fueled by a rise in high-tech and innovation shares, reflecting the potential pivotal role the tech innovation sector could play in "leading the high-quality development of the world's second-largest economy."

Analysts said that the stock market is off to a good start for the fourth quarter and is likely to maintain the robust post-holiday performance. This month, a number of listed companies will release their third-quarter earnings, which are expected to show a continuous rebound in profit growth, cementing investor confidence in their fundamentals. 

The rally is being driven by several factors, including the recovery in the profit growth of domestic industrial enterprises, significant progress in the global and domestic artificial intelligence sector, and the steady growth in the holiday travel data, according to a report by China International Capital Corp (CICC).

CICC noted that investors are enthusiastic that more pro-growth policy measures could come out as the government works on the country's 15th Five-Year Plan (2026-30).

"Chinese authorities' sustained policy efforts have consolidated market confidence. Meanwhile, the country has implemented a moderately loose monetary policy, which guarantees ample liquidity in the market," Yang said. 


Global Times