Chinese stocks closed higher on Monday, with the benchmark Shanghai Composite Index up 1.51 percent to 3,883.56 points.
The Shenzhen Component Index closed 2.26 percent higher at 12,441.07 points. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, surged 3.00 percent to close at 2,762.99 points.
Market analyst Timothy Pope highlighted the trends behind the numbers in his recap of Monday's stock market performance.
"It's fair to say, the rally which has propelled the Chinese Mainland stock markets to another decade high today has been the source of a lot more chatter, in the media, online and just in person. Maybe it's a judgment on the people I hang out with, but it was a hotly discussed topic at the weekend. And that hype and sense of excitement has helped send the Shanghai Composite Index up another 1.5 percent today to a fraction more than 3,883 points. Now, before I get into today's winners and losers, I do want to look at the whys of the market gains for a second. And the big one is that there's just a lot of liquidity around at the moment and it is going into stocks. For retail investors, they're looking at the bull market and then they're looking at bonds or the housing market. And stocks really just look like the only game in town. So we're seeing money come out of deposits and go into stocks. We're also seeing on the institutional side continued heavy buying from Chinese insurance companies which have been sitting on huge pots of cash," he said.
"And there's an increasing feeling that this isn't going to go away. HSBC today lifted its year-end target for the Shanghai Composite Index to 4,000 points and the CSI 300 to 4,600. Although I don't think we'll going to have to wait till year's end to hit those levels if the current trends continue. Back to today though we saw chips, rare earths and property stocks firmly in the lead. Chip stocks were lifted by a pretty big jump for Cambricon Technologies which is quite a well-known domestic chip firm seen by some as China's answer to Nvidia. It was up 11 percent today, which is a staggering gain and it's rapidly closing in on the title of A-share's most expensive stock. This title has been held by Kweichow Moutai for most of the last decade, but if the current trend is anything to go by, Moutai won't be able to keep the crown for long. As of closing today Cambricon shares are fetching 1,385 yuan each, while Kweichow Moutai is at 1,490 yuan. So another session like today will be enough to see the chip developer on top," he added.
Analyst recaps Chinese stock market performance on Monday
