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TMTPOST – Mainland Chinese equities climbed on Monday, pushing the Shanghai Composite Index to its highest level in a decade as investors shifted money from bonds and bank deposits into stocks in search of higher returns.
The Shanghai Composite rose 1.2% to 3,740.50 at mid-morning, a level last seen on August 19, 2015. The CSI 300 Index also gained 1.2%, nearing its highest close since September 2024. The move came alongside a modest rise in China’s 10-year government bond yield, which ticked up 2.7 basis points to 1.775%, a four-month high.
Since hitting a low of 3,040.69 on April 7, 2025, the Shanghai Composite Index has surged 22.7%. Over the same period, the Shenzhen Component Index rose nearly 30%, while the tech-heavy ChiNext Index soared 47%.
As of 10:34 a.m. Monday, China’s total A-share market capitalization exceeded 100 trillion yuan for the first time in history, according to the Securities Times.
On the company level, Agricultural Bank of China (ABC) leads the A-share market with a valuation of 2.19 trillion yuan, followed by Industrial and Commercial Bank of China (ICBC) at 2.02 trillion yuan. Four other major stocks—Kweichow Moutai, PetroChina, Bank of China, and CATL—each surpassed the 1-trillion-yuan market capitalization mark.
In Hong Kong, the Hang Seng Index advanced 0.2% to 25,321.11, while the Hang Seng Tech Index jumped 1.3%. On the mainland, the tech-heavy STAR Market surged 3.1%, and the Shenzhen ChiNext Index gained 3.6%, with telecom and IT stocks leading the CSI 300 Index.
“Bond yields and deposit rates remain low, while the wealth effect from equities continues to attract funds,” said Amber Zhou, analyst at Haitong International. “We expect the rotation from deposits and bonds into stocks to continue.”
Market analysts attribute the rally to several factors, including continued government support for strategic sectors, record-low bond yields encouraging a rotation into equities, and expectations of further economic stimulus amid slowing growth. Foreign investor inflows into A-shares have also increased, aided by relaxed trading quotas and rising confidence in China’s long-term growth prospects.
Despite headwinds from domestic property market pressures and global geopolitical tensions, broad-based buying has sustained momentum. Sector-wise, technology, consumer discretionary, and industrials outperformed, while traditional energy and real estate stocks lagged.
Investors are also watching the upcoming Jackson Hole symposium in Wyoming, where Federal Reserve Chair Jerome Powell is scheduled to speak Friday. Markets are pricing in more than an 80% chance of a 25-basis-point U.S. rate cut next month following softer-than-expected July jobs data.
Despite a slowdown in July’s official growth data, regular state buying and hopes for additional stimulus have underpinned investor confidence in Chinese stocks.
In Hong Kong, shares of Zijin Mining fell 1.8% amid weaker gold prices, while property developer Longfor Group dropped 2.9% amid continued pressure on home prices. Tencent eased 0.3% to HK$590.50.
Earnings season is also underway, with Xiaomi, Baidu, and Hong Kong Exchanges and Clearing scheduled to report this week. So far, 31 of 85 Hang Seng Index companies have disclosed results, showing an average profit growth of 11% compared with 17% in the prior six months, according to Bloomberg.
Elsewhere in the Asia-Pacific region, Japan’s Nikkei 225 rose 0.7%, Australia’s S&P/ASX 200 added 0.2%, while South Korea’s Kospi fell 1.2%.
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