HONG KONG: China and Hong Kong stocks jumped on Monday to extend a rally, led by rare earth and property sectors, as abundant liquidity fuelled continued gains.
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At the midday break, the Shanghai Composite index was up 0.9% at 3,858.59, a fresh 10-year high.
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China’s blue-chip CSI300 index added 1.4%, surpassing the intraday high made last October to reach a four-year peak.
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Turnover on the Shanghai and Shenzhen exchanges surpassed 2 trillion yuan for a ninth consecutive day, extending the longest such streak on record.
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The rare earth sector was up 5.6% and the artificial intelligence sector up 3.5%.
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The property sector jumped 5.8%, with developer China Vanke surging by the 10% daily limit, as Shanghai eased house purchasing restrictions.
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The semiconductor sector added 1.1% at midday break after rallying nearly 6% in early trades. Chipmaker Cambricon Technologies jumped 5.5% to a record high.
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“We see the rally continuing on abundant domestic liquidity from deposit migration, fund issuance, and insurance fund buying,” analysts at HSBC Qianhai said in a note.
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The firm also lifted the end-2025 targets to 4,000 for the Shanghai Composite index and 4,600 for CSI 300, driven by abundant liquidity, suggesting an upside potential of 5-7%.
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“There was visibly increasing amount of excitement/noise/debates among the onshore retail investors,” Goldman Sachs said in a sales note, adding that international investors’ interest towards A-share could also follow.
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In Hong Kong, the benchmark Hang Seng Index was up 2.1% to 25,866.49, reaching the highest level since October 2021.
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The tech index rose 3.1%, and Chinese H-share index listed in Hong Kong rose 2%.
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