A-shares surge, led by agriculture and pharma

Huang Yixuan
Over 60 stocks hit 10-percent daily limit amidst heavy trading. Liquor sector falters after announcement of tax reforms.
Huang Yixuan

Chinese stocks rose for a third consecutive day on Thursday, with almost all industry sectors posting gains. 

The benchmark Shanghai Composite Index picked up 0.78 percent to 2,947.71 points. The smaller Shenzhen Component Index jumped 1.38 percent to 9,638.1 points, while the blue chip CSI300 index closed 0.82 percent higher at 3,874.64 points.

Turnover on the two major bourses topped 420.58 billion yuan (US$59.14 billion), expanding from 365.8 billion yuan in the previous session.

Stocks of 62 companies listed on the A-share markets skyrocketed by the 10-percent daily cap.

The agriculture, forestry, animal husbandry and fishery sector extended their rally to led the gains today, with Wind Information's sub-index for this industry soared 2.89 percent. Muyuan Foods Co surged 7.91 percent, while Tecon Biology Co and Shandong Yisheng Livestock & Poultry Breeding Co both rose over 5 percent.

Pharmaceutical shares were also among the biggest gainers, with stocks of four A-share listed companies — Baotou Dongbao Bio-Tech Co, Shenyang Xingqi Pharmaceutical Co, Hangzhou Tigermed Consulting Co and Shenzhen Kangtai Biological Products Co — all jumping by the daily limit of 10 percent.

Communication companies, computer firms, transportation shares and the electronic component sector all saw robust gains as well.

Liquor-related stock prices fluctuated during the morning session, as the State Council released a circular on Wednesday on reforming the distribution of tax revenue between central and local governments after large-scale tax and fee reductions. The council has now decided to transfer consumption taxes on goods from production or import to wholesale or retail sectors to expand tax sources for local governments.

The gradual implementation of this reform may have a big influence on the liquor industry in the long term, as the competitiveness of regional small and medium-sized liquor enterprises would decline, according to China International Capital Corporation.

Almost all stocks listed on the new STAR Market closed higher. Only one out of the 33 companies, Jiangsu Cnano Technology Co, dipped slightly by 0.82 percent.

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