Leisure services, tech shares boost market
China’s A-share markets were back to winning ways on Tuesday as leisure services, technology and securities brokers stocks shot up.
Encouraged by gains overnight on Wall Street, equity market benchmarks regained their footing. After a positive opening, the benchmark Shanghai Composite Index gained 0.78 percent to end the day at 2,984.67 points.
The smaller Shenzhen Component Index jumped 2.04 percent to around 11,992.35 points, while the ChiNext Index hit a four-year record high of 2,438.20, rallying 2.77 percent.
For the month, the ChiNext Index advanced over 16 percent.
The combined turnover of the two bourses came to 746.6 billion yuan (US$105.5 billion), compared with the previous trading day’s 716.3 billion yuan.
Gains were broad-based, with leisure service and technology companies emerging on top on Tuesday.
China Duty-free Products (Group) Co Ltd, the only state-owned company authorized by the State Council to carry out duty-free business nationwide, saw its shares surge by the daily maximum of 10 percent to close at 154.03 yuan per share.
The strong rally came after news that China's Hainan Province will increase its annual tax-free shopping quota to 100,000 yuan per person a year from the current 30,000 yuan.
The purchasing managers' index for China's manufacturing sector ticked up to 50.9 in June from 50.6 in May, according to data from the National Bureau of Statistics.
Following a recent Caixin report that the China Securities Regulatory Commission plans to grant securities licenses to commercial banks, UBS Securities analyst Cai Haifeng said the regulator intends to create a "super-large broker" to deal with the impact of foreign investment banks' entry.
Top brokers will retain their competitive edge thanks to their strong pricing, distribution and risk control capabilities, while smaller brokers with small corporate customer bases and weak pricing power may lose market share, Cai noted.