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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Stocks surge on hopes of support, tax cuts
    2018-10-23  08:53    Shenzhen Daily

SHARES listed in Shanghai and Shenzhen surged yesterday in the wake of coordinated statements of support for plunging equity markets by senior regulators and as China prepares to overhaul its income tax law for individuals.

The Shanghai Composite Index surged 4.09 percent, the biggest advance since September 2015 and extending Friday’s 2.6 percent gain, after sinking to a four-year low last week. The blue-chip CSI300 index rose 4.3 percent to 3,270.27, its best day since November 2015. Shenzhen’s startup board ChiNext surged 5.2 percent.

Over the weekend, President Xi Jinping emphasized China’s unwavering support for the private sector, according to Xinhua. The government also released new details on proposed personal income tax cuts, Xinhua said.

On Friday, Vice Premier Liu He, who oversees the economy and financial sector, joined the heads of the China Securities Regulatory Commission, the China Banking and Insurance Regulatory Commission and the People’s Bank of China in coordinated statements to rally investor confidence amid a bruising market slump.

Yang Hai, an analyst at Kaiyuan Securities in Xi’an, said the statements of support “laid the foundations for a rebound” after a slump caused by factors including the Sino-U.S. trade war, domestic economic adjustments and especially concerns over the rising risk of forced margin calls.

“We see a high likelihood that the A-share market will enter a period of rebound,” Yang said in a note. He added that planned tax cuts and the release of individual income tax deductions would particularly support banks, insurance and consumer firms.

Investors snapped up shares across sectors, with securities firms seen as particularly likely to benefit from official moves to support stock markets. At least 25 brokerages, which are among the biggest lenders to private firms trading on the mainland exchanges, surged by the daily 10 percent limit. Moves by authorities to reduce stock-pledge risks should stabilize the equity market and help lift valuations for Chinese brokers, according to Goldman Sachs Group Inc.

Consumer-related shares climbed amid expectations personal income tax cuts will give citizens more spending power.

Despite the gains, the Shanghai Composite Index is still down 19.7 percent for the year, while the CSI300 has fallen 18.9 percent. (SD-Agencies)

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