Markets notched up significant gains during a week of volatile trading even as the benchmark surged to record levels. Stocks declined on Monday due to record turnover following regulatory action aimed at reducing speculation based trading. The Shanghai Composite index rebounded on Tuesday, powered by small cap stocks.
Markets surged on Wednesday, following speculation that further monetary easing would take place to boost the economy. The benchmark index gained again on Thursday following a session of volatile trading caused by disappointing manufacturing data.
China Mobile Ltd. CHL, the largest wireless operator of China, reported mixed financial results in the first quarter of 2015. China Petroleum & Chemical Corp. SNP also known as Sinopec completed a $6.4 billion bond sale.
Last Week’s Developments
Last Friday, the Shanghai Composite advanced 2.2%, closing at its highest level since Mar 2008. Speculation that the government will take fresh measures to boost the economy, which seems to have hit a slowdown, encouraged investors. The benchmark index had surged 81% over a six month period at the point, the highest among the global indexes.
The CSI 300 moved up 1.8%, fuelled by gains from industrial and energy stocks, which jumped 4%. The Hang Seng China Enterprises Index declined 1.3% while the Hang Seng lost 0.3%.
The Shanghai Composite added 6.3% over last week, marking its sixth week of consecutive gains. China’s economy increased only 7% during the first quarter of 2015, the slowest in six year. Other data released last week was equally disappointing. This includes below par numbers on retail sales, fixed asset investment and industrial production, which increased by only 5.6% in March.