Investing.com -- Chinese stocks rose sharply at the open on Monday after Beijing announced a slew of new measures aimed at restoring faith and attracting investors back to its battered equity markets.
The blue-chip Shanghai Shenzhen CSI 300 index jumped 2.7%, while the Shanghai Composite index added 2.6%. Hong Kong’s Hang Seng was also boosted by Chinese stocks, rallying 2.2%.
China had over the weekend unveiled new measures to help support the stock market, most notably halving the stamp duty on stock trades. Local stock exchanges also lowered their margin financing requirements, helping draw investors back after nearly a year of heavy losses.
Chinese stock indexes were trading at their lowest levels for the year, hit by worsening sentiment towards the country as a post-COVID economic recovery ran out of steam.
Investors had also regarded Beijing’s earlier measures to support the economy as largely lackluster, and had called on the country to roll out more targeted, fiscal support for the economy.
Analysts said that while the country’s latest measures are expected to spur some near-term gains in the stock market, they are unlikely to reflect or spur any broader strength in economic growth.
Real Estate stocks were the best performers in China for the day, as Beijing also announced a further loosening of mortgage rules to support the sector. A slowdown in real estate has been one of the biggest headwinds to the Chinese economy, given that the sector is a key driver of growth.
Country Garden Holdings (HK:2007), Longfor Properties (HK:0960), and other stocks that were battered by fears of a real estate crash, rose sharply on Monday.
But China Evergrande Group (HK:3333) was the sole exception among its peers, with the real estate developer tumbling over 80% after its shares resumed trading in Hong Kong following a 17-month break.
Focus this week is now squarely on more economic cues from China, particularly purchasing managers’ index data, due on Thursday and Friday.