Chinese Stock Market Ends on High After Leadership's Assurance of Economic Growth
Girish Shetti | | Mar 08, 2016 07:00 AM EST |
(Photo : Getty Images) Trading on China's stock market rose for a fourth straight day on Monday, buoyed by assurances from the country's leaders.
China's stock market rallied on Monday for fourth straight day, as investors took cue from positive statements made by the country's leadership at the National People's Congress' annual gathering over the weekend.
The Shanghai Composite Index rose as high as 1.3% during intra trading on Monday, but faltered during the closing session to notch up a gain of 0.8%, ending the day at 2897.34. Shares of companies in the construction, technology and pharmaceutical sectors made substantive gains during Monday's rally.
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The notable thing about Monday's rally is that there was a huge volume of trading in shares of companies that are likely to profit from policies laid during National People's Congress on Saturday.
Shares of many infrastructure-related companies especially witnessed huge buying, as government announced during National People's Congress that it plans to spend big on infrastructure projects in coming years.
Shares of infrastructure companies like Hainan Mining Co. made substantive gains at the Shanghai stock market, jumping 10 percent during intra trading. In the Hong Kong stock market, shares of China Railway Construction Corp. rose by 4 percent and shares of Maanshan Iron & Steel Co. rose by 3.3 percent.
Experts say despite Monday's strong rally, investors are concerned about China's move to reduce overcapacity in state-owned enterprises, which may lead to job cuts that would affect millions of Chinese workers.
On Sunday, China's top economic planner Xu Shaoshi said that restructuring state-owned companies is unlikely to result in major layoffs.
Meanwhile, other Asian stock markets witnessed a mix day on Monday. Korea's Kospi was up 0.1% and Australia's S&P/ASX 200 climbed 1%, while Hong Kong's Hang Seng ended flatly and Japan's Nikkei was down by 0.6%.
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