Tuesday, December 7

China’s stock market closes at the highest level since the 2008 financial crisis | Stock markets

China’s stock market has exploded to its highest level since the 2008 financial crisis as the world’s second-largest economy recovers rapidly from the coronavirus pandemic.

The CSI 300 index, which tracks the value of the largest companies in the Shanghai and Shenzhen stock markets, closed up 1.9% Tuesday at 5,368 points, the highest level since January 2008.

Narrowly topping the 5,353 level reached in 2015, when fears about a hard landing for China’s economy after years of highly successful growth led to a share sell-off, the new milestone stands as the latest dramatic shift in global financial markets since the start of the coronavirus pandemic.

It comes as China’s economy is experiencing a faster-than-expected recovery at a time when other nations around the world are still grappling with rising infections and severe disruption to social and business life caused by the pandemic. .

As a nation at the center of the initial Covid-19 outbreak, Chinese GDP fell for the first time in four decades in the first months of 2020, yet many analysts believe that strict controls to contain the spread of the disease helped to settle the basis for a faster return to relative normality.

China avoided the technical definition of a recession last year (two consecutive quarters of falling GDP) and returned to growth in the three months to June as it eased lockdown restrictions.

After posting growth of just 1.9% for 2020 as a whole, the lowest level in 30 years, the International Monetary Fund expects China’s economy to grow more than 8% in 2021, dramatically outpacing the recovery in many other countries.

Nigel Green, CEO of deVere Group, an investment management firm, said gains in the Chinese stock market reflect its rapid recovery. “China’s rebound is quite remarkable, compared to other major economies, many of which are once again implementing tighter restrictions to stop the spread of Covid amid a tsunami of new cases.”

“China’s already impressive economic recovery is likely to pick up momentum and this will be extremely attractive. But as 2020 showed us perhaps too clearly, things can change quickly and so-called ‘certainties’ can change overnight, ”he said.

The new milestone for the Chinese stock market came on a busy day of trading in the London stock market, with the FTSE 100 closing 0.6% higher at 6,612, after posting modest losses earlier in the year. day amid concerns about the economic impact of the third Covid. confinement in England.

However, there is hope for a stronger economic recovery in Britain once people get the vaccines, which could drive the front-line index higher. Joshua Mahony, senior market analyst at financial trading firm IG, said: “The swift nature of the vaccination process should ensure that any weakness caused by the lockdown is met by buying pressure as we look towards a reopening in March.”


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