Chinese stocks continued their impressive rally on Monday, with mainland markets on track for their best month in nearly a decade, following additional stimulus measures from Beijing aimed at counteracting a slowdown in the broader economy.
Benchmark indexes in mainland China started the week strong, building on their best weekly performance in nearly 16 years recorded on Friday. The CSI300 blue-chip index rose more than 6.22%.
The Shanghai Composite Index surged 5.7%, while Hong Kong’s Hang Seng Index increased by 3.34%.
Shares of property companies experienced significant gains after China’s central bank announced late Sunday that it would instruct banks to lower mortgage rates for existing home loans before Oct. 31. This move is part of extensive policies to support the struggling property market.
In addition to this, the city of Guangzhou lifted all restrictions on home purchases, while Shanghai and Shenzhen relaxed their buying curbs.
“The market is still surprised by China’s policy support, and momentum is still continuing,” said Kenny Ng, a strategist at China Everbright Securities International in Hong Kong.
Mainland-listed property stocks advanced by 6.4%, while the Hang Seng Mainland Properties Index surged 8.4%. Shares in consumer staples rose 7%, and the smaller Shenzhen index soared 8.2%.
For the month, the CSI300 index is expected to gain over 18%, marking its best performance since December 2014. Similarly, the Shanghai Composite Index is poised to end September with a 14.8% increase, the highest since April 2015.
The Hang Seng Index is set for its best month since November 2022, with a 14.7% rise.
“A coordinated stimulus blitz suggests that China has reached a ‘whatever it takes’ moment,” noted Eli Lee, chief investment strategist at Bank of Singapore.
He added, “Beyond a short-term rebound, although it is premature to assess, we cannot rule out that this could be the start of a sustainable bull market.”
Recent developments followed aggressive stimulus measures from Beijing, including significant rate cuts and fiscal support, aimed at revitalizing the ailing economy.
The People’s Bank of China also introduced new tools to boost the capital market, including a swap program that facilitates easier access to funding for purchasing stocks.
The CSI300 index soared nearly 16% last week, while the broader Shanghai Composite jumped nearly 13%, both achieving their largest weekly gains since November 2008. The Hang Seng Index marked its biggest weekly rise since 1998 and the fifth largest in the last half-century.