China shares post highest gain in 3 years yesterday
Feb 26, 2019 (China Knowledge) - Chinese stock markets remain relatively flat today following a rally on Monday which saw the largest daily gain in Chinese shares in over three years, buoyed by a decision by President Trump to delay additional tariffs on Chinese goods.
The benchmark Shanghai Composite Index is down 0.67% to 2941.52 today after surging 5.6% to close at 2961.28 yesterday. Similarly, the CSI 300 index is down 1.2% today after posting gains of 5.9% yesterday.
Most notably yesterday, turnover at the Shanghai and Shenzhen stock exchanges hit more than RMB 1 trillion, a milestone not achieved since November 2015, at the height of a stock market bubble in the country. The turnover was more than three times the average daily turnover for the past three months.
While the high turnover indicates strong inflow of funds, the market has to receive more positive news in order to maintain such a momentum and will likely fluctuate significantly moving forward with a correction possibly even happening this week.
Financial institutions such as insurers and securities brokerages led to charge on Monday, followed by supplier to Huawei, after the tech giant launched its first foldable screen smartphone over the weekend.
In due time, China’s retail investors may be making a comeback into the market due to rising investor confidence which will spur further market growth in the country given that a large proportion of trades in the Chinese stock market is carried out by such retail traders.
Market sentiment currently remains strong with still potential for more rises in stock prices come March with more positive news expected then.
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