China's Stock Surge: Bull Market Fueled by Fresh Funds and Eased Tensions
China's stock market reached its highest point since 2015, driven by eased trade tensions and new equity-focused mutual funds. The Shanghai Composite Index soared, supported by government efforts to regulate industries. Despite macroeconomic challenges, retail participation holds promise for sustained market growth.
In a significant upturn, China's stocks climbed to their highest levels since 2015 on Wednesday. This surge is invigorated by a strategic shift of investment funds into equities, spurred by easing trade tensions and a regulatory crackdown on excessive competition. China's blue-chip CSI300 Index was up by 1.1%, and the Shanghai Composite Index rose by 1%, marking a notable push in the financial landscape.
An influx of more than 200 mutual funds since July, with over 70% tailored to equities, has injected 67.7 billion yuan into the market, propelling the bull run forward. The government has actively worked to mitigate industrial overcapacity and curb price wars, further igniting investor confidence. Meanwhile, the total turnover of onshore shares has exceeded 2.5 trillion yuan for a third straight day.
The solar industry, amongst others, has been urged by China's industry ministry to reinforce regulations. Despite some disappointing macroeconomic indicators, analysts at UBS project a continuing rally, driven by rising retail participation. However, tech stocks remained flat while shares of innovative drug makers fell. Pop Mart, by contrast, reported impressive profits, boosting its share value by 12.5%.
(With inputs from agencies.)
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