SHANGHAI: China's blue-chip index on Monday ended at its highest in more than five years, led by gains in materials and energy stocks, as hopes of a vaccine-led recovery boosted risk appetite. The blue-chip CSI300 index rose 1.3% to 5,005.03, its highest closing level since June 17, 2015, while the Shanghai Composite Index added 1.1% to 3,414.49.
The CSI300 materials index and the CSI300 energy index added 2.1% and 3.8%, respectively. A top official of the US government's vaccine development effort said on Sunday that the first vaccines could be given to US healthcare workers and others by mid-December.
There are expectations of a global economic recovery as a vaccine will be available sooner or later, even as China's domestic economic recovery has already recovered, said Jin Jing, an analyst with Caitong Securities. Jin added that valuations of cyclical firms remained low, adding to their appeal to investors, particularly to some mutual funds that could shift their positions at the end of the year.
Analysts at investment bank CICC said they were optimistic about a valuation recovery for leading cyclical firms and high-growth cyclical companies, citing robust downstream demand. New energy firms also gained ground, as Beijing lifted its renewable power subsidy target by nearly 5% for 2021.
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