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The Chinese mainland stock market is anticipated to keep climbing following a robust bullish surge after the New Year holiday, according to industry experts.
Investor confidence received a boost from the strong performance of the Hong Kong stock market and the Chinese yuan’s impressive exchange rate gains during the holiday period. These factors are expected to sustain the market’s ongoing structural growth, stated a leading analyst from Galaxy Securities in a recent research report.
Looking ahead, the market’s upward momentum will largely hinge on policy expectations, advances in industrial sectors, and how short-term uncertainties like global geopolitical tensions may influence trends.
The post-holiday spring rally in the mainland stocks is already underway, with some fluctuations expected. Technology stocks and certain cyclical industries are projected to have a relative edge following the holiday break, according to Huaxin Securities’ strategy team.
For January, the outlook remains optimistic, with significant chances of a sustained upward movement and a potential spring offensive in the market, as indicated by China Merchants Securities’ analysts.
On the fundamentals front, local government special bond issuance is expected to accelerate this year. Central government investments and projects aligned with national strategic initiatives are also predicted to speed up, alongside an uptick in government spending and investment data, according to CMS.
In terms of capital flows, the increase in profits suggests domestic investors are likely to continue increasing their holdings of mainland stocks after the start of the year. The Chinese yuan’s appreciation has become more evident, boosting the likelihood of foreign capital re-entering the market amid improving economic prospects.
Yesterday, the Shanghai Composite Index gained 1.5%, reaching 4,083.67 — its highest close since July 2015. It continued to rise today by 0.1%, marking 14 consecutive days of gains.
The Shenzhen Component Index also saw gains yesterday, rising 1.4% to 14,022.50 — its highest close since January 2022 — and edged up another 0.1% today. Additionally, the ChiNext Index increased by 0.9% yesterday and 0.3% today, closing at 14,030.56, its best since November 2021.
The rally was partly driven by a surge in new trading accounts, which increased nearly 10% last year compared to 2024. The Shanghai Stock Exchange data shows that 27.3 million were new individual investor accounts, and 104,539 were new institutional investor accounts — up 9.7% and 35%, respectively.
In the past month alone, roughly 2.6 million new accounts were opened, a 9% increase from the previous month and a 31% rise year-over-year, according to SSE statistics.
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