Thursday, July 4, 2024 06:12 PM
China Regulator Eases Delisting Concerns, Stocks Surge
- CSRC reassures investors, only 30 companies face delisting next year
- Shanghai Composite index records largest daily gain in 10 weeks
- UBS upgrades China's GDP growth forecast to 4.9%
Image Credits: BloombergChina stocks soar as CSRC allays delisting fears, Shanghai index surges, UBS raises GDP forecast.
HONG KONG Stocks Surge as China Regulator Eases Delisting Concerns
China stocks experienced a significant boost on Wednesday, with the Shanghai Composite index recording its largest daily gain in 10 weeks. This surge came as the China Securities Regulatory Commission (CSRC) addressed worries surrounding new delisting regulations, reassuring investors after a recent sell-off in small-cap shares.
The CSRC clarified on Tuesday that the stricter rules would not trigger a wave of delistings. Contrary to concerns, the regulator stated that only around 30 companies would face delisting next year under the new regulations, alleviating fears among investors.
The positive sentiment was reflected in the market performance, with the small-cap CSI 2000 INDEX leading the gains by surging 6.7%. Additionally, UBS upgraded its 2024 real GDP growth forecast for China from 4.6% to 4.9%, citing improved first-quarter economic data and a stronger export outlook.
By the end of trading, the Shanghai Composite index was up 2.14% at 3,071.38. The blue-chip CSI300 index also saw a 1.5% increase, with notable gains in the financial, consumer staples, real estate, and healthcare sectors.
Elsewhere in the region, MSCI's Asia ex-Japan stock index rose by 0.3%, while Japan's Nikkei index closed down by 1.3%. The Hang Seng index in Hong Kong edged up by 0.02% to 16,251.84, with the Hang Seng China Enterprises index also posting a modest gain.
In sector-specific movements, energy shares on the Hang Seng dipped by 0.8%, while the IT sector and property sector saw slight declines. Conversely, the financial sector ended the day 0.43% higher, contributing to the overall positive performance of the market.
The upbeat response in China's stock market following the CSRC's reassurances highlights the importance of regulatory clarity in maintaining investor confidence. With positive economic indicators and growth forecasts, the market is poised for further stability and potential growth in the coming months.
