Regulators' announcements boost for market

China’s main equity indexes jumped on Monday led by financial firms, after regulators lifted the equity investment cap for insurers and encouraged mergers and acquisitions among stock brokerages.

At close, the benchmark Shanghai Composite Index climbed 3.11 percent to 3,314.15 points, while the smaller Shenzhen Component Index advanced 2.55 percent to 13,448.85 points.

The blue chip CSI300 Index increased 2.98 percent to 4,680.30 points and the ChiNext Composite Index startup board advanced 1.31 percent to 2,697.30 points.

Chinese mainland markets saw a net inflow of 3.4 billion yuan (US$485 million) in overseas capital via Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong.

Turnover on the two major bourses expanded to 1.19 trillion yuan, compared with 1.11 trillion yuan in the previous session.

Most sectors gained with gainers outnumbering losers by 1,529 to 151 on the Shanghai bourse and 2,090 to 172 in Shenzhen.

Insurers and securities firms post strong performances with share prices in the former sector advancing 5.78 percent and the latter increasing by 5.29 percent.

New China Life Insurance Co Ltd, Sealand Securities Co Ltd, Southwest Securities Co Ltd and Founder Securities Co Ltd all hit the daily cap of 10 percent.

This was boosted by news on Friday that China’s banking and insurance regulator said it was raising the cap on how much the country’s insurers can invest in equity assets, an effort trying to bring more long-term funds into the capital market.

Securities firms also gained markedly after the regulator encouraged mergers and acquisitions.

Industrial Securities said: “Raising the investment cap for insurers will benefit small and medium-sized insurance companies in particular.”

Kaiyuan Securities said: “Compared with previous mergers in the securities industry dominated by the regulator, this round of mergers will be dominated by the market, which will promote the scale development of the industry.”