Shanghai stock benchmark hits decade high, HK nears 4-year peak

HONG KONG: China and Hong Kong stocks jumped on Monday to extend a rally, led by rare earth and property sectors, as abundant liquidity fuelled continued gains.

• At the midday break, the Shanghai Composite index was up 0.9% at 3,858.59, a fresh 10-year high.

• China’s blue-chip CSI300 index added 1.4%, surpassing the intraday high made last October to reach a four-year peak.

• Turnover on the Shanghai and Shenzhen exchanges surpassed 2 trillion yuan for a ninth consecutive day, extending the longest such streak on record.

• The rare earth sector was up 5.6% and the artificial intelligence sector up 3.5%.

• The property sector jumped 5.8%, with developer China Vanke surging by the 10% daily limit, as Shanghai eased house purchasing restrictions.

• The semiconductor sector added 1.1% at midday break after rallying nearly 6% in early trades. Chipmaker Cambricon Technologies jumped 5.5% to a record high.

• “We see the rally continuing on abundant domestic liquidity from deposit migration, fund issuance, and insurance fund buying,” analysts at HSBC Qianhai said in a note.

• The firm also lifted the end-2025 targets to 4,000 for the Shanghai Composite index and 4,600 for CSI 300, driven by abundant liquidity, suggesting an upside potential of 5-7%.

• “There was visibly increasing amount of excitement/noise/debates among the onshore retail investors,” Goldman Sachs said in a sales note, adding that international investors’ interest towards A-share could also follow.

• In Hong Kong, the benchmark Hang Seng Index was up 2.1% to 25,866.49, reaching the highest level since October 2021.

• The tech index rose 3.1%, and Chinese H-share index listed in Hong Kong rose 2%.