China stocks rebound, bolstered by positive trade progress and economic data

The Chinese stock markets bounced back strongly on Friday, boosted by positive progress regarding US and China trade as well as positive service sector data.

The Chinese stock markets bounced back strongly on Friday, boosted by positive progress regarding US and China trade as well as positive service sector data, with the benchmark Shanghai composite jumping by 2.05 percent.

The A-share market opened lower and the Shanghai composite hit a four-year new low during the trading session. However, bolstered by the strong gains of heavily-weighted financial stocks, especially brokerage and insurance names, the benchmark composite reversed earlier losses and closed the day up by 2.05 percent or 50.51 points to stand at 2,514.87.

The smaller Shenzhen Component Index surged by 2.76 percent to end at around 7,284.84 points, and the Nasdaq-style ChiNext enterprise board gained 2.52 percent to finish at 1,245.16 percent.

TF Securities Co Ltd, a Wuhan-based brokerage, saw its shares jump by the daily limit of 10 percent to close at 6.81 yuan (US$0.99) per share.

The rebounding of the Chinese market came amid a recent announcement from the country’s Ministry of Commerce that a Sino-US vice ministerial meeting would be held on January 7 and 8, and the latest positive data from China’s service sector.

On Friday, a private survey by the Caixin/Markit showed that the services purchasing managers' index (PMI) for December rose to a six-month high of 53.9, which was much higher than the 50.0 mark which separates expansion from contraction.

Chen Jian, an investment consultant at Datong Securities, was quoted by Caixin.com as saying that the recent progress in trade relations between the world’s top two economic powers has lifted investors’ sentiment, but it remains to be seen whether there will be another round of recovery for A-shares.

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