Charts of the Day: China’s Stock Turnover Tops 1 Trillion Yuan Again

The Chinese mainland stock market, the world’s second-largest, is bouncing back after months of poor performance amid the coronavirus pandemic, with more investors betting on a bull market as the domestic epidemic has been largely brought under control.

On Thursday, the daily turnover on the Shenzhen and Shanghai stock exchanges passed the 1 trillion yuan ($141.5 billion) mark for the first time since March 10, according to data from the bourses. The turnover hit nearly 1.2 trillion yuan the next day

Analysts with brokerage GF Securities Co. Ltd. said in a Thursday note (link in Chinese) that A-shares, or yuan-denominated Chinese mainland stocks, are continuing to recover. That’s due to easing monetary policy, enterprises’ growing optimism and signals of further financial reform, they said.

Shares of brokerages, real estate developers and coal producers led the rise of A-shares, according to a research note (link in Chinese) released Thursday by Central China Securities Co. Ltd.

Outstanding margin financing, or the value of shares that investors have bought with borrowed funds, reached nearly 1.16 trillion yuan on Thursday, according to data from the Shanghai and Shenzhen exchanges. That’s up 14.3% from the beginning of the year.

However, multiple analysts warned investors that in the second half of the year, the government might phase out some supportive measures, causing liquidity growth to slow and posing a downside risk to the stock market.

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)