SHANGHAI, Dec 31 (Reuters) – China’s stocks rose to multi-year highs on the last trading day of 2020, as investors chewed Sino-European investment contract and Beijing’s policy support for its capital markets .
The CSI300 blue-chip index closed 1.9%, at 5,211.29, the highest level since June 15, 2015 while the Shanghai Composite Index gained 1.7% to 3,473.07, the highest level since February 5, 2018.
Major indices gained strong gains each year, with the Shenzhen startup board seeing its strongest year since 2015, thanks to how the economy recovered from the coronavirus pandemic and policy support.
The European Union and China on Wednesday agreed on an investment deal that will give European companies greater access to Chinese markets and help correct what Europe sees as unbalanced economic ties.
“The deal exceeds market expectations and has a significant impact,” said Yan Kaiwen, an analyst with China Fortune Securities.
Also encouraging sentiment, China on Wednesday said it planned to increase the proportion of the country’s annuity funds that can be used to invest in equities, which could be 300 billion Yuan ($ 45.95 billion) introduce to markets.
For the month, CSI300 rose 5.1%, while SSEC fired 2.4%.
For the year, CSI300 received 27% and SSEC 14%.
ChiNext tech-heavy starter board rose 63% in 2020, posting its biggest annual gain since 2015, compared to a 43% gain for Nasdaq.
“The strength of the start-up board reflects a change in China’s economic structure, as the country moves to high-quality development,” said Niu Chunbao, chairman of Wanji Asset, a Shanghai-based private securities fund.
Analysts and traders said the hard gains in the market were also supported by a recovery in the Chinese economy from the divergent levels.
The country’s economy is expected to expand by around 2% in 2020, the weakest pace in more than three decades but stronger than other major economies struggling to contain disease.
($ 1 = 6.5290 Chinese Yuan)
Reporting by Luoyan Liu and Emily Chow: Edited by Neil Fullick