The Shanghai Composite Index advanced 0.3 per cent to 3,739.60 as of 11.16am local time, heading for the highest close since August 19, 2015. The CSI 300 Index climbed 0.2 per cent.
In Hong Kong, the Hang Seng Index added 0.1 per cent, while the Hang Seng Tech Index dropped 0.2 per cent.
Mainland stocks are in focus as the market reverses years of declines and bucks a slowing economy, with investors rotating out of low-yielding fixed-income products to chase higher returns. A part of the 160 trillion yuan (US$22.3 trillion) household savings built up since the Covid-19 pandemic is expected to flow into stocks due to falling deposit rates and a continuing downturn in property prices, according to analysts.
“We’ve seen long-term capital and individual investors piling into the equity market,” said Li Xuewei, a strategist at HSBC Jintrust Fund Management in Shanghai. “Approaching US rate cuts and abundant overseas liquidity have also boosted risk appetite. China’s excessive household savings may flow into the stock market and fuel further gains.”
Telecoms and consumer stocks were the biggest gainers among the 10 industry groups of the CSI 300 Index, while technology and energy companies proved to be a drag. Liquor producer Jiangsu Yanghe Distillery rallied 4.7 per cent to 73.10 yuan in Shenzhen and soft drink maker Eastroc Beverage gained 4.4 per cent to 297.60 yuan.
