Chinese stock market is in a state of euphoria
China's CSI 300 stock index jumped 5.7% on Monday, showing the highest daily growth since February 2019. The rise to a fresh five-year high was fueled by publications in the state media stating that investors should invest in Chinese equities in order to profit from the economic recovery after the pandemic. For example, a China Securities Journal editorial devoted to the "healthy" bull market, Xinhua wrote that investors are in a hurry to invest in stocks, and Shanghai Securities News solemnly wrote that the signs of the bull market are getting clearer and clearer.
Experts note that the efforts of state media to attract the attention of retail clients to the stock market may be successful, but remind that, as in 2014 and 2015, everything can end in a very painful correction. They also point to Bloomberg data, according to which Chinese stock purchases with leverage have already reached their highest level since 2015. Meanwhile, traders report an increase in activity of the so-called "national team" representatives (companies with state participation) on the buyers' side - some market participants pay attention to the unusually high level of trading volume and sharp rise in quotations of securities of state insurance companies, which are often the subject of interest to this group of players.