China's A share market is getting rid of previous sluggishness and regaining strength gradually and steadily after suffering from a round of panic decline since the middle of June.
The benchmark Shanghai Composite Index began to rebound since late August after dipping to the lowest point of 2,850.71 points in the previous round of market plunge and by October 29 market close, the index had rose nearly 20 percent.
Analysts attributed the recovery of the market to the emerging of new economic growth points, improved liquidity conditions and authorities' crackdown on illicit trading activities that have largely helped restore market sentiment.
China has been maintaining an ample liquidity environment after the People's Bank of China (PBoC), the central bank, adopted a string of stimulus measures, including reducing benchmark interest rates and required reserved ratio (RRR) twice since August and conducting proper open market operation to increase long-term liquidity supply while keeping the total money supply steady.
Meanwhile, the pressure for foreign capitals to flow out of the country has been eased along with narrowing swings of China's currency yuan against US dollar. In addition, the China Securities Regulatory Commission (CSRC), the top securities regulator, has waved its fist toward illicit trading behaviors.
It has conducted strict measures to clear and rectify inside trading and market manipulation activities, which are blamed for the main causes for the sharp market falls, in a bid to maintain orderly market development.
The regulator has also planned to enhance clearing and rectifying work for illegal futures transactions. Moreover, China Premier Li Keqiang stressed at the Summer Davos in September that China would strive to foster a transparent, healthy and steady capital market.
Yi Gang, vice PBoC governor, also said at the annual meeting of the International Monetary Fund (IMF) in early October that China's stock market correction had basically completed. Chinese government would take measures to avoid systematic risks and the stock market swings had put on limited impact on the macroeconomy, Yi said.
Following improved market sentiment, more investors began to run into the market. Statistics from China Securities Depository and Clearing, the Shanghai and Shenzhen bourses recorded 330,300 new investors in the week ended on October 23, 34,800 more than that seen in the previous week, the highest level over the past few weeks.
Besides, up to 23.63 million investors participated in stock trading during the week, 1.34 million more than that of the previous week.
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