Chinese investors pull profits from Shanghai market rally
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China’s stock market rally of the past week or so ground to a sudden halt Friday, as investors took profits following a 15.5 per cent jump in the Shanghai Composite market since June 30.
Gripped by market fever and a fear of missing out on the stocks rally, Chinese investors have been herding into share trading platforms, according to Chinese media.
Retail investors have been joining the rush to trade Chinese company shares, Chinese media outlet Caixin reported.
The Shanghai Composite Index retraced 1.5 per cent in Friday to 3,400 points from Thursday’s market close of 3,450 points, but was up 15.5 per cent from 2,982 points on June 30.
China’s economy has shown continued underlying strength in recent months despite parts of the country enduring a shutdown during the Coronavirus pandemic, analysts said.
“When you look at 2020 so far, the growth is impressive. You are talking double-digit growth year on year in March, April, May period,” Ben Cleary, portfolio manager for Tribeca Investment Partners said in an interview this week with Stockhead resident expert Peter Strachan.
“This is despite the economy being closed mid-January to mid-March,” he said.
Demand from China for Australian commodities such as iron ore and copper has held up.
“Steel production was one of the few industries in China that was not negatively impacted in the first quarter on the year, and that is because the steel sector in China is a very localised workforce,” Cleary added.