SHANGHAI: China stocks rose to fresh seven-year highs on Friday morning, on track for their seventh straight week of gains, as investor interest shifts from pricy small caps to blue chips.
Investors got a hint of the market’s focus from divergent performances of two stock index futures launched on Thursday.
The SSE50 Index futures <0#CIH:>, based on an index tracking China’s 50 big companies, jumped 7.4 percent on debut while the CSI500 Index futures <0#CIC:> which is based on an index tracking 500 small-cap stocks, fell 1.4 percent.
“Index futures reflect market expectations, so the flood of money gushing into the stock market will be guided into blue chips,” said Zhang Chen, analyst at Shanghai-based hedge fund manager Hongyi Investment.
The market also drew its optimism from a bullish research report by brokerage Shenwan Hongyaun, which predicted that China’s stock market will rise further on the back of central government support, as money from retail investors, national pension funds and foreigners will keep flowing in.
The CSI300 index rose 1.7 percent, to 4,590.14 points at the end of the morning session, bringing this week’s gain so far to 5.7 percent. The Shanghai Composite Index gained 2.1 percent, to 4,281.39 points, on track to end this week up more than 6 percent.
