China's stocks jumped to their highest level in almost 20 months on Friday, with financial and resources shares powering the Shanghai index past a key resistance level as investor confidence grows.
China's stocks jumped to their highest level in almost 20 months on Friday, with financial and resources shares powering the Shanghai index past a key resistance level as investor confidence grows.
A flurry of stronger-than-expected earnings reports from major Chinese companies in recent days has raised hopes that economic momentum will remain solid through the rest of the year, defying analysts' forecasts for a gradual slowdown.
Sentiment is also supported by signs that the restructuring state-owned enterprises (SOE) is picking up pace.
The blue-chip CSI300 index jumped 1.6 percent, to 3,795.75, while the Shanghai Composite Index gained 1.8 percent to 3,331.52 points, the best performance in a year. For the week, both gauges rose 1.9 percent.
Analysts say market bears would capitulate if the Shanghai Index can hold firmly above the 3,300 point mark - a level at which there has proven to be stiff resistance, with three failed attempts to breach it over the past nine months.
There have only been fleeting breaches of the 3,300 point level since 2015, with the index quickly falling back each time.
"A breakthrough could turn market bears into bulls and attract fresh money," said Yang Hai, strategist at Kaiyuan Securities.
Technical analysis aside, market sentiment appears also shifting on an improvement in fundamentals.
Market leaders in a range of sectors, including China Vanke Co , China Life Insurance Co Ltd and Baoshan Iron & Steel Co Ltd , all published solid first-half results on Friday, adding to a growing list of firms which either met or exceeded market expectations.
Investors are also encouraged by signs that the restructuring of state-owned enterprises is accelerating.
Days after China Unicom unveiled its reform plans, China National Gold Group Gold Jewellery Co, a unit of China's largest gold producer, also announced mixed-ownership reforms.
Stocks rose across the board. The banking sub-index jumped 3.2 percent, pushing the valuations of China Construction Bank and Industrial and Commercial Bank of China above their respective forward book values.
The materials sectors also rose sharply, with an index tracking coal producers surging 4 percent. The sector benefits from a commodity boom as Beijing cuts capacity to reduce pollution.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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