Shanghai stocks continue the weekly rally on upbeat investor sentiment

Shanghai stocks have grown for four consecutive days in the past week to notch a one-month rally amid upbeat economic outlook.

Shanghai stocks have grown for four consecutive days in the past week to notch a one-month rally amid upbeat economic outlook.

The Shanghai Composite Index added 0.38 percent today to 3,487.86 points, led by banks and military-related shares. The index has remained at a two-year high since Wednesday and was boosted by official data showing continuous industrial recovery and faster economic growth.

China’s gross domestic product grew 6.9 percent in 2017, up 0.2 percentage points from a year ago, the National Bureau of Statistics announced yesterday. The growth rate beat the government’s target and marked the first acceleration in six years’ time.

Meanwhile, the bureau suggested a recovery among domestic manufacturing companies --  the nationwide capacity utilization, a gauge to show how much companies use their installed productive capacity, rebounded 3.7 percentage points from a year ago to 77 percent, notching a five-year high to show China’s progress in oversupply cuts and industrial upgrading.

The banking sector has been leading the growth over the week, which was on the back of overall economic recovery, said Wang Xiaojun, financial analyst at Cinda Severities.

“Improvement in economic performance and upbeat outlook helped to raise profits of banks,” he said. “That is also benign to the whole market.”

Investors expect the banking sector to continue the rally after their shares slumped during the fourth quarter last year, which attracted funds in the market, said Liu Li, an analyst at Shanxi Securities.

The military-related stocks rose after the central government urged collaborations between military and civilian sectors to boost defense technology.

Wuxi Rural Commercial Bank Co jumped 9.95 percent to 9.50 yuan (US$1.48) today, while China Aerospace Times Electronics Co, a defense technology company, gained 3.65 percent to 7.66 yuan.

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