China’s stock markets have surged to their strongest levels in ten years. On Wednesday, the Shanghai Composite Index closed at 3,766 points, gaining 1% from the previous day. The CSI300 Index rose by 1.1%, while Hong Kong’s Hang Seng Index climbed a modest 0.2%.
Big Boost From Fund Inflows
The latest rally has been supported by strong inflows into equity-focused funds. Since July, more than 200 new mutual funds have been launched, raising a total of 67.7 billion yuan. Notably, about 70% of these funds are directed toward stocks, providing fresh momentum for the markets.
Government Policy Support
Investors have also welcomed Beijing’s steps to stabilize key industries. Government officials recently met with solar industry leaders to address overcapacity issues and reduce price wars. Stronger regulations in the renewable energy sector are expected to create a healthier business environment.
Strong Trading Activity
Trading activity remained very high. Turnover in onshore shares exceeded 2.5 trillion yuan for the third trading day in a row, highlighting active participation by both institutional and retail investors.
Market Outlook
Analysts at UBS noted that the rally continued even though China’s macroeconomic data has been relatively weak. They expect more retail investors to join the market if momentum continues. However, sector performance was mixed: technology stocks stayed flat despite declines in the Nasdaq, and innovative drug makers slipped by around 1%.
Company Highlight
Toy maker Pop Mart was a big winner of the day, surging 12.5% to reach record highs. The surge came after the company reported very strong profit results for the first half of the year.
Overall, China’s markets are showing their strongest momentum in a decade, powered by fresh investment inflows, supportive government measures, and optimistic investor sentiment.
