China’s stocks continue to rally on Tuesday third day in a row as stock markets saw increased activity from commodity producers and automakers.
The benchmark index saw the highest up tick in five months after positive reports about earnings boosted investors' confidence. The Shanghai Composite Index, which is often taken as the representative of the Chinese economy, surged for the third consecutive day as Chinese shares saw positive impacts of strong economy. The index surged 1.2 percent to close at 2,841.41 with energy and metal producers taking the lead yet again.
Analysts believe that the index can rise to 3,000 points in the coming weeks provided the market is able to weather the tightening of the screws on the housing market and increased supply of new stocks.
The Shanghai index has gained 20 percent since the lowest drop in the current year observed on July 5. The earlier losses were attributed to tighter regulations in the real estate market and dropping of the annual new lending target by 22 percent. Energy sector is surging on speculations that the U.S. Federal Reserve would further ease the monetary policies; metal producers are also hoping for the same while investing in the stocks.
Both sectors have seen a surge of 19 percent and 13 percent, respectively, in this month, and remain the best performers among the 10 industry groups in the CSI 300 Index. The broader measure saw a total surge of 1.3 percent to 3,172.73 today, which compounds the three-day 8.1 percent rally.
