China’s recent economic stimulus package has had a profound impact on stock trading at the Shenzhen Stock Exchange, catapulting daily transactions to unprecedented levels. The infusion of this substantial stimulus has led to a surge in trading volume, surpassing a staggering USD 142.5 billion per day on both the Shanghai and Shenzhen stock exchanges over the past three trading days.

The latest data reveals that more than 5,200 stocks experienced gains on the Shanghai and Shenzhen bourses, with trades exceeding CNY 1.4 trillion (equivalent to USD 199.5 billion). This surge in stock market activity is exemplified by the notable performance of key indices. The Shanghai Stock Exchange Composite Index rose by 2.8 percent, nearing the 3,100 mark, while the Shenzhen Stock Exchange Component Index recorded a substantial 6.7 percent increase, reaching 9,514.86. Additionally, the Beijing Stock Exchange 50 Index surged by 11 percent to 717.02.

In a historic milestone, Shenzhen’s ChiNext Index, akin to the Nasdaq, experienced a remarkable 10 percent surge to reach 1,885.49, marking its most significant single-day gain. The daily trading volume on this exchange also hit a new pinnacle at CNY 400 billion (approximately USD 57 billion).

The stock market rally was notably driven by gains in the food and beverage sector, predominantly led by liquor stocks. Noteworthy stocks in this sector, including Sichuan Swellfun and Shede Spirits, either reached the exchange-imposed limit or soared by more than 10 percent. Similarly, the real estate and non-banking financial sectors also witnessed substantial increases, with numerous stocks hitting the limit or surging by over 10 percent. Conversely, bank stocks experienced a decline, with major institutions such as Agricultural Bank of China, Bank of Communications, China Construction Bank, and Industrial and Commercial Bank of China all witnessing a dip of more than 3 percent.

As market sentiment remains optimistic, several private equity firms have shown bullishness towards the future market outlook. Founder Securities anticipates a significant increase in investors’ risk appetite, driven by proactive monetary and fiscal policies. Galaxy Securities echoed this sentiment, stating that the market confidence has been rejuvenated by the robust policies implemented.

The recent easing measures announced by China’s financial authorities, including reductions in the reserve requirement ratio, policy interest rate, and mortgage interest rates, have further bolstered market confidence. Additionally, the introduction of a new relending tool aimed at facilitating loans to listed companies and major shareholders to support stock buybacks has been a significant development in the current market landscape.

In conclusion, the Shenzhen Stock Exchange, buoyed by China’s substantial stimulus package, has witnessed an unprecedented surge in trading activity, reflecting renewed market confidence and optimism among investors. The impact of these measures on the stock market is poised to shape the future trajectory of China’s financial landscape.