Stock market rally led by consumer firms

Tracy Li
Gains in most sectors took the stock market back into positive territory with leisure services, pharmaceuticals and electrical equipment companies among the top gainers. 
Tracy Li

The stock market returned to positive territory on Wednesday following gains in most sectors.

The benchmark Shanghai Composite Index rose 0.17 percent to close at 3,279.71 after a higher opening.

The smaller Shenzhen Component Index climbed 0.67 percent to finish at around 13,110.07, while the ChiNext Index gained 1.74 percent to end the day at 2,599.88.

Combined turnover on the two bourses was 660.7 billion yuan (US$97.3 billion), compared with 755 billion yuan in the previous session.

Most sectors gained, with leisure services, pharmaceuticals and electrical equipment companies among the top gainers.

Developments surrounding the coronavirus pandemic around the globe may have weighed on investor sentiment and triggered the big rise in vaccine makers, analysts said.

However, the biological vaccine industry has a high entry threshold, calls for heavy R&D investment and will be under strict supervision, they said.

China is due to announce guidelines for the 14th Five-Year Plan (2021-2025) in October and UBS expects it to de-emphasize or lower its GDP growth target and focus on boosting domestic demand and structural reform along the theme of "dual circulation.”

China may also target higher spending in R&D and education in the new plan and may allocate more resources to fundamental and frontier research, and technology bottleneck areas such as semiconductors, robotics and advanced manufacturing.

This should help Chinese corporates to transform their business models with more digital services and increased online penetration, the banking giant said.

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