Real estate shares drive gains on Chinese mainland market

China stocks saw big gains on Monday, with real estate shares opening higher following the implementation of positive new property policies.

The benchmark Shanghai Composite Index rose 1.4 percent to 3,117.06 points, while the Shenzhen Component Index climbed 1.41 percent to 10,611.74 points.

The Shanghai Stock Exchange STAR 50 Index, meanwhile, edged up 0.82 percent to 942.43 points, and the ChiNext Composite Index closed 0.85 percent higher at 2,118.03 points.

Total trading volume on the Shanghai and Shenzhen bourses added up to 884.9 billion yuan (US$121.68 billion), up 139.6 billion yuan from the previous trading day. Of this, 404.5 billion yuan of turnover was traded on the Shanghai exchange.

Of note, more overseas capital flew into the Chinese mainland market on Monday, reversing the net outflow for five consecutive trading days last week.

The mainland market posted a total net influx of over 6.68 billion yuan via the Stock Connect schemes linking Shanghai and Shenzhen with Hong Kong, among which the Shanghai Stock Connect contributed 3.83 billion yuan of net influx.

A major boost for A shares was the announcement of eased mortgage rules for first-time home buyers in China's megacities last week, which allow buyers to enjoy preferential loans for first-home purchases regardless of their previous credit records. All the four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, have already put the new rules into effect.

As a result, the real estate sector as well as the related property services and household goods shares all opened higher on Monday, lifting the whole stock market, and closed with gains in spite of some retreat during the day.

Meanwhile, cyclical industries experienced significant gains. The coal and non-ferrous metals sectors, iron and steel shares, and petroleum and petrochemical firms all surged substantially.