Shanghai Stock Index Reaches 10-Year Peak Amid Policy and Trade Hopes

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The benchmark stock index in China rose above the 4,000-point threshold for the first time in ten years today, reaching its highest level since 2015. Experts attribute this surge to improved external investor sentiment and supportive domestic policies, fueling optimism for further growth through the end of the year.

The Shanghai Composite Index reached a 10-year high of 4,010.73 during the morning session but closed slightly lower at 3,988.22, down 0.2 percent. Meanwhile, the Shenzhen Component Index declined by 0.4 percent to 13,430.10 after initially rising by 0.6 percent in the morning. The ChiNext Index decreased by 0.2 percent to 3,229.58.

The rally is mainly driven by two factors, according to a market analyst. The first is the preliminary agreement reached during trade talks between China and the United States over the weekend in Kuala Lumpur, which alleviated external uncertainties and increased risk appetite among investors.

The second factor involves encouraging domestic policy signals. Last week, recommendations from the 15th Five-Year Plan emphasized high-quality development, accelerated technological innovation, and environmental sustainability. These themes align with current market trends such as artificial intelligence, semiconductor industries, and energy storage.

Looking ahead to the fourth quarter, the market remains optimistic, supported by hopes of ongoing economic recovery and possible rate cuts by the Federal Reserve. Sectors like state-owned enterprise reform, robotics, and semiconductors are expected to remain focal points.

Technological innovation and industrial modernization have become central national initiatives, which are anticipated to sustain strong performance in related stocks, said an industry advisor. However, the longevity of this rally depends on continued policy support, including monetary policy stances and potential fiscal stimulus measures. Additionally, sustained foreign investment inflows would provide further stability for the market.