Chinese mainland markets bucked the broad cautiousness in Asian equities on Monday amid expectations of another round of policy stimulus.
The Shanghai Composite climbed steadily throughout the session, and finished the day at 3,928.41 points, a gain of 4.92%.
The Shenzhen Component Index gained 4.31% to close at 13,302.96. The ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, surged 5.03% to end at 2,706.72.
The upswing came amid reports in the media that Chinese authorities had approved an ambitious reform plan to enhance the competitiveness of state-owned enterprises (SOEs).
China currently has 112 central-government backed enterprises, with a total market value of over 10 trillion yuan ($1.6 trillion). After reforms, experts estimate that the number of central enterprises will be reduced to 30-50 in 5-7 years.
The reports resulted in broad gains in SOE counters, with China MEHECO, a state-held first aid and medical dressings producer, and state-owned power generation firm Huadian Energy Co Ltd hitting the daily up limit.
Shipbuilding firms, defense concepts and aircraft manufacturers were also among the big winners on the day, with China CSSC Holdings Ltd., a leading ship maker, and Sufa Technology Industry Co Ltd hitting the daily 10% up limit.
More than 300 A shares reached the daily ceiling, while only six registered declines.
Meanwhile, trading has been suspended in shares of six companies controlled by the China Cosco Group and the China Shipping Group.
The official announcement of the suspension says that the parent companies are “considering important plans.”
Media reports say this could refer to a merger between the China Cosco Group and the China Shipping Group, which will give birth to the world’s fourth-largest container shipper.
However, China Shipping Haisheng, which is among the six companies in whose shares trading has been suspended, has denied the reports, saying that it has not received any notice from the China Shipping Group, which is its second-largest shareholder.
Story by CCTV News
Financial advisor Henry To discusses China’s economy
CCTV America interviewed Henry To, chief investment officer at CB Capital Advisers about China’s recent market rally.