Market gains as factories resume working
Chinese stocks gained on Monday, with most factories resuming work after the extended holiday.
The benchmark Shanghai Composite Index rose 0.51 percent to 2,890.49 points, while the smaller Shenzhen Component Index jumped 1.1 percent to 10,728.46 points. The ChiNext Component Index, meanwhile, continued to perform strongly, soaring 1.31 percent to 2,042.18 points, and the blue chip CSI300 Index closed 0.41 percent higher at 3,916.01 points.
Trading volume on the two major bourses totaled 885.8 billion yuan (US$126.9 billion), down from the previous session’s 929.6 billion yuan, while the mainland market saw a net outflow of 3.27 billion yuan via the Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong.
Stocks of nearly 200 listed companies surged by the daily limit of 10 percent, while around 30 tumbled by 10 percent.
The agriculture, forestry, animal husbandry and fishery industry rallied from the previous session, with over 20 companies in the sector posting gains hitting the 10 percent cap. The surge can be attributed to the Consumer Price Index released on Monday which rose both month on month and year on year due to the tight supply.
The headline CPI in January jumped 5.4 percent from the same period last year, which was faster than expected and also an eight-year high. Prices for food rocketed by 20.6 percent from a year earlier to be the major factor driving the CPI growth.
"The unexpected sharp rise in the CPI has some influence on the market, but it won't last for long, as the Spring Festival effect has gone and traffic and logistics are gradually recovering," Wang Ansong, an analyst at Sinolink Securities, said in a note.
Stocks related to Tesla also performed strongly, as Tesla’s Shanghai factory resumed production on Monday. Over 10 firms, including Shanghai Beite Technology Co, China Baoan Group Co and Guangdong Wencan Die Casting Co, soared by the maximum 10 percent.
Building material firms, the auto sector, and non-ferrous metal shares were also among the big gainers.
Medical and pharmaceutical shares, however, extended the retreat in the previous session, with stocks of over 10 companies plummeting by 10 percent.
On the SSE STAR Market, 43 of its 80 listed companies saw rises in their stock prices, while the rest posted declines.