Record-Breaking Rally: Beijing’s Stimulus Fuels $1.8 Trillion Bull Market Surge in Chinese Stocks

Chinese shares break new ground as Beijing's stimulus leads to a US$1.8 trillion surge in the bull market. Trading activities reached a historical peak in Hong Kong, surpassing Friday's record. The joint transactions in Shanghai and Shenzhen also achieved an unmatched level.

The Hang Seng Index experienced a 2.4 per cent rise, contributing to a total increase of 17 per cent in September, marking its highest monthly growth since November 2022. The Shanghai Composite Index also saw significant growth, rising 8.1 per cent and totaling a 17 per cent increase for the month, a record not seen since April 2015.

Shares valued at approximately HK$505.8 billion (US$65.1 billion) were traded, surpassing the previous record set on Friday. The combined trading volume on the Shanghai and Shenzhen exchanges escalated to a historic high of 2.6 trillion yuan (US$370.6 billion), which is over twice the amount of China's total foreign direct investment from the previous year.

James Wang, the leader of China strategy at UBS in Hong Kong, anticipates the current pace to persist in the lead up to the real fiscal reaction due to an enhanced market outlook and minimal positioning. He expressed that a dual approach, bolstering consumption and local government funding, would be the most favorably acknowledged by investors.

Quarter past one

China reports a 4.7% growth in the second quarter, which is below the anticipated rate.

The recent surge in enthusiasm has continued from the rally that started on September 24, when Beijing introduced its most aggressive financial aid plan yet to combat a downturn in the housing market. This slump had initially started with the stringent restrictions on developers known as the "three red lines" that were implemented in August 2020. Since then, approximately $1.8 trillion in value has been regained across the three major exchanges.