Chinese stock market may keep rallying in the second half of 2019, as China and US are likely to strike a final trade deal to end the costly trade war, and Beijing is set to accelerate reforming China's domestic financial market.
On Monday, all three major indexes for Chinese A shares opened higher, with the Shanghai Composite Index up 2 percent, the Shenzhen Composite Index up 3.33 percent and the NASDAQ-style growth enterprise board up 3.16 percent as of 11:30 am.
Apart from these three indexes, over 3,000 stocks opened high on Monday, with over 100 reaching the daily upper cap of 10 percent.
Previously over the weekend, both the US and China agreed to restart stalled trade talks and cease increasing tariffs on each other's goods at the
G20 summit, easing the tensions between the two countries and clearing some uncertainties for the stock market.
Other stock markets also appear to have welcomed the positive tone of the summit. Shortly after the meeting on Sunday, the Dow Jones Industrial Average, the S&P 500 and the Nasdaq-100 futures trades all surged, with the Dow Jones Industrial Average futures trading 199 points higher, according to a report by CNBC on Monday.
Bai Ming, deputy director of the
Ministry of Commerce's International Market Research Institute told the Global Times on Monday that the restart of the trade talks are a sign that the market "has been long waiting for", and he predicts optimistically for future of the Chinese market.
"The market is responding positively as the trade war is hurting everyone and everyone wants it to stop," Bai said, "so even though this is just a mention of possible trade talks with no details settled, the market is showing great anticipation."
Dong Shaopeng, a veteran analyst who advises the China Securities Regulatory Commission (CSRC), said that apart from the prospect of trade talks, a series of market-oriented reforms and institutional innovations can also expect to be positively received by investors and drive up the market. This would include broader access for foreign investors.
"The reforms can stimulate more investors to engage in the market, and encourage listed companies to improve their bottom-line," Dong said. "I believe that the investors will respond positively to the reforms, and we are cautiously optimistic for the stock market in the second half of the year."
