A-shares soar as turnover hits 5-year high

China stocks skyrocketed on Monday, with the overall turnover of A shares hitting a five-year high.

The benchmark Shanghai Composite Index surged 5.71 percent to close at 3,332.88 points, the highest figure since February 7 in 2018. The smaller Shenzhen Component Index soared 4.09 percent to 12,941.72 points.

The ChiNext ended 2.72 percent higher at 2,529.49 points, while the blue chip CSI300 Index surged 5.67 percent to 4,670.09 points.

Trade volume on the two major bourses added up to 1.57 trillion yuan (US$220 billion), up 394.5 billion yuan from the previous session to reach the highest level in five years. 

Overseas capital swarmed into the Chinese mainland markets, posting a net influx of 13.65 billion yuan via the Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong.

As for individual shares, nearly 280 listed firms posted gains of more than 9 percent, while none declined by over 9 percent.

Monday’s rises were mainly led by the sharp increases in financial shares.

The securities sector was the biggest gainer among all industries, with over 20 brokerages surging by the daily limit of 10 percent, including The Pacific Securities Co, Xishui Strong year Co Ltd Inner Mongloia, and Sinolink Securities Co.

Banks also performed strongly, with at least 20 posting gains hitting the 10 percent cap, including Chongqing Rural Commercial Bank, China Merchants Bank Co and China Zheshang Bank Co.

Real estate shares also jumped sharply, with over 10 listed firms up by 10 percent. 

Insurance firms, the national defense and military industry, catering and tourism shares, and semiconductor companies were all big gainers.

On the STAR Market, 113 of the 118 listed firms advanced, while the others posted losses. National Silicon Industry Group Co rose the most by 20 percent to hit the daily limit, while Beijing Balance Medical Technology Co shed 4.24 percent.

Guotai Junan Securities expected to see further increases in the major stock indexes. Under the downward trend of risk-free interest rates, the asset allocation value of the stock markets is rising and more incremental funds are cramming into the markets, which can lead to further gains in the stock indexes.