China stocks jump on the first trading day of 2018

The Shanghai Composite Index and Shenzhen Component Index both rise over 1 percent following gains made by cyclical stocks. 

China shares ended the first trading of the new year higher today following gains made by cyclical stocks.

The Shanghai Composite Index gained 1.24 percent, or 41.16 points to close at 3,348.33, hitting a new high in over a month.

The Shenzhen Component index rose 1.25 percent, or 137.6 points, to 1,1178.05, and the Nasdaq-style ChiNext added 0.97 percent to 1,769.67.

Cyclical shares like Shangfeng Cement, Huaxin Cement and Tongli Cement all rose by the maximum daily limit of 10 percent.

Dai Kang, chief strategy analyst at Guangfa Securities, said that he was bullish on cyclical stocks because these companies would benefit from the central government's  supply-side reform.

The People’s Bank of China introduced a new policy tool last Friday to unfreeze more cash for commercial banks during the coming week-long Spring Festival in February.

Analysts said the measure will prepare the banks to deal with strong demand for cash during the holiday.

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