China Blue Chip Index Hits 5-year High; Australian Shares Tumble as Borders Close

The major Asia-Pacific stock indexes finished mostly higher on Monday with some scaling four-month peaks as investors bet heavily on a revival in Chinese activity to sustain global growth. MSCI’s broadcast index of Asia-Pacific shares outside Japan climbed 1.5% to its highest since February.

Even more impressive was a jump in Chinese blue chips which surged nearly 6.0%, on top of a 7% gain last week, to their loftiest level in five years.

On Monday, Japan’s Nikkei 225 Index settled at 22714.44, up 407.96 or +1.83%. Hong Kong’s Hang Seng Index finished at 26339.16, up 966.04 or +3.81% and South Korea’s KOSPI Index closed at 2187.93, up 35.52, up 1.65%.

In China, the Shanghai Index settled at 3332.88, up 180.07 or +5.71% and Australia’s S&P/ASX 200 Index finished at 6014.60, down 43.30 or -0.71%.

China’s Blue Chip Vault to 5-year High on Hopes of Economic Recovery, Policy Support

China stocks closed higher for a fifth straight session on Monday, extending a robust rally, led by financial shares on hopes of a quick economic recovery, Beijing’s continued reforms in the capital markets and ample liquidity, Reuters reported.

The blue-chip CSI300 index closed up 5.7% at 4,670.09 points, its highest value since June 25, 2015, while the Shanghai Composite Index climbed to its highest since March 2018. The CSI300 also posted its biggest one-day gain since February 25, 2019, while SSEC logged its best session since July 9, 2015.

“China has become a safe haven for investors now, as the recent coronavirus outbreak in Beijing helps investors realize the impact from a second wave of outbreak, if any, in the country would be very limited,” said Zhang Chengyu, vice general of Beijing-based Shiji Hongfan Asset Management Company.

“The rally now is just the beginning of a strong rising trend, and more money would pour into the A-share market,” Zhang added.

Hong Kong Stocks Track Mainland Gains, End at Over 4-Month High

Hong Kong shares closed at a more than four-month high on Monday, tracking equities in the mainland.

The Hang Seng Index rose 3.81%, while the China Enterprises Index gained 4.7%. The sub-index of the Hang Seng tracking energy shares rose 3.9%, while the IT sector rose 1.05%; the financial sector ended 4.85% higher and the property sector rose 4.21%.

Border Closures Hurt Share Market

The Australian stock market closed lower on Monday as state border closures with Victoria sparked fear of a second wave that could damage the country’s economic rebound.

Monday’s slight market slump comes off the back of a Deloitte Access Economics report, which flagged economic growth would contract by 3 percent in 2020 as a result of the COVID-19 shutdown.

Major bank shares made little movement throughout the day. The energy and material sectors also suffered declines. Additionally, refreshed lockdowns on travel also impacted the share price performance of Qantas.