Northbound foreign capital boosts Chinese stock market
The Chinese stock market ended higher Monday, with the ChiNext Index surging 1.98 percent and more than 3 billion yuan (US$448.1 million) of northbound foreign capital flowing into the A-share market via China’s stock connect initiatives.
The benchmark Shanghai Composite Index was up 0.02 percent to close at 3,225.12 after fluctuating throughout the day.
The smaller Shenzhen Component Index gained 1.06 percent to finish at 13,420.96, while the ChiNext Index surged 1.98 percent to end its trading day at 2,708.39.
Combined turnover on the two bourses came to 812.4 billion yuan, compared with 870.8 billion yuan in the previous session.
More than half the sectors gained, with home appliance makers, automakers and electronics companies leading the way.
Shares of China International Capital Corporation rose 30.99 percent to close at 37.70 yuan on its first trading day on the Shanghai Stock Exchange's main board.
Wendy Liu, head of China Strategy at UBS Global Research, predicted Chinese equities may relatively outperform as global equities reassess risk.
A new wave of COVID-19 outbreaks in the United States and Europe has cast doubt over the underlying global economic recovery and led to a global equities sell-off last week. Such a "risk-off" move could deepen if more countries are forced to impose partial travel restrictions or lockdowns, Liu said.
She added that as China keeps COVID-19 under control, its relative stability and continued economic recovery should help its equities, particularly A shares.