Stocks surge in first-day transactions

Updated 2018-02-23 10:21:03 China Daily

Investors check share prices at a securities brokerage in Shanghai on Thursday.(Photo/China News Service)

Optimistic investors take cue from strong holiday retail, tourism figures

Chinese stocks rallied on Thursday amid positive trading sentiment buoyed by robust tourism and consumption data over the Lunar New Year holiday and stabilizing global equity markets following previous steep selloffs.

The benchmark Shanghai Composite Index surged 2.17 percent to 3268.56 points at the close on the first trading day of the Year of the Dog. The gain was led by rallies in airline, liquor and food stocks.

Thursday's gain reflected investors' recovering appetite for risks and rising optimism sparked by the strong holiday retail and tourism figures. Sales in the retail and catering sectors reached 926 billion yuan (6 billion) during the holiday period, up 10.2 percent year-on-year, according to the Ministry of Commerce.

The country also saw a 12.6 percent rise in tourism revenue to 475 billion yuan during the holiday. Chinese people traveled more this Spring Festival, making a total of 386 million holiday trips, up by 12.1 percent year-on-year, according to the China National Tourism Administration.

"There is a high chance that the A-share market could continue to go up in the short term as the market is supported by strong domestic consumption data as well as positive signals from the external markets," said Qin Peijing, an equity strategist at CITIC Securities Co Ltd.

The renewed risk appetite among investors and improved liquidity situation after the holiday also contributed to short-term rally of A-shares, according to Chen Guo, an equity strategist at Essence Securities Co Ltd.

Analysts and fund managers remained bullish in their long-term outlook on Chinese stocks, citing favorable factors including rising foreign interest along with the opening of the country's capital markets, potential opportunities related to the reform of State-owned enterprises, and the consumption potential of the Chinese people.

"Foreign interest in the mainland A-share market is an increasingly emerging theme that may offer some support to A shares and will help increase institutional ownership," Lynda Zhou, a portfolio manager at Fidelity International, said in a research note.

China's A shares will be included in the MSCI Emerging Markets Index in June and companies with strong business models, good corporate governance and robust balance sheets will likely see the most interest from foreign investors, Zhou added.

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