Business / Markets

A-share bull resumes, Shanghai index up 3.1%

By Dai Tian ( Updated: 2015-05-19 16:28

A-share bull resumes, Shanghai index up 3.1%

A Chinese investor looks at prices of shares at a stock brokerage house in Nanjing city, East China's Jiangsu province, May 19, 2015.[Photo/IC]

Chinese stocks rallied on Tuesday, led by brokerages and technology firms, with the benchmark Shanghai index surging 3.1 percent.

The Shanghai Composite Index closed at 4,417.55 points, up 134.06, while the Shenzhen Component Index advanced 454.74 points to 15,127.38.

A gauge of brokerages gained nearly 7 percent on Tuesday, as Huatai Securities, Changjiang Securities, Dongxing Securities and Orient Securities jumped by the daily limit of 10 percent, and Haitong Securities added 7.5 percent.

The outstanding balance of margin trading in Shanghai climbed for a sixth day to a record high of 1.28 trillion yuan ($206 billion) as of Monday, data from Shanghai bourse showed.

Nanjing Bank and New China Life Insurance surged more than 5 percent, while other financial companies, including Industrial Bank, China Merchants Bank and Shanghai Pudong Development Bank, edged up 4 percent.

Technology-themed stocks remain bullish, as welding machine developer Shenzhen JASIC Technology, Shanghai Hi-tech Control System Co and Harbin Gong Da Hi-tech Enterprise Development Co rallied by 10 percent daily limit. A gauge of smart machine producers climbed nearly 4 percent.

Concerns over local government debts have been eased in the past week as the country's central bank on Friday confirmed the 1 trillion yuan debt-for-bond swap plan. The move is expected to cut local governments' interest payments and extend the maturity of their debt.

Jiangsu province fired the first shot and issued 52.2 billion yuan of municipal bonds on Monday, which includes securities to be swapped for existing debt and new general notes.

A stabilizing property market, debt swap and the central bank's easing makes investors remain constructive on Chinese equities, said research team of Nomura Financial Group in a note on Monday.

"We maintain a short-term cautious stance on the MSCI China, but a bullish view through the index's likely peak in 2017," added the report.

Hot Topics

Editor's Picks