SHANGHAI: China stocks index rose to its highest in almost seven years on Tuesday morning, breaking through a key psychological resistance level to raise investors’ hopes that the market has resumed a bull run begun midway through last year.
The Shanghai Composite Index was on track to rise for a fifth consecutive day, hitting the highest level since June 2008, and standing firmly above 3,400 points – seen by many as a level where many investors tend to reduce holdings.
Trading volume, which touched two-month highs on Monday, continued to expand, as investors regained confidence after Chinese Premier Li Keqiang vowed on Sunday to support the economy if it continues to slide and hurt employment.
“There’s no doubt it’s a bull market,” said David Dai, Shanghai-based investment director at Nanhai Fund Management Co Ltd. “The previous consolidation is only the prelude to further rises.”
Dai said that money is flowing to the stock market seeking higher returns after the government eased monetary policy but curbed investment in real estate and trust products.
The CSI300 index rose 1.1 percent, to 3,745.19 points at the end of the morning session, while the Shanghai Composite Index gained 1.2 percent, to 3,489.46 points.
Hong Kong shares also rose, with the Hang Seng index up 0.3 percent, to 24,022.97 points, and the Hong Kong China Enterprises Index rising 0.5 percent, to 11,876.50.
