Mainland stock exchanges rise on capital market reform pledge

Stock markets in the Chinese mainland soared on Monday, boosted by the government's pledge to reform the nation's capital markets.

The benchmark Shanghai Composite Index jumped by 41.74 points or 2.08 percent to 2,052.87 points on Monday.

The Shenzhen Component Index rose by 155.70 points or 2.17 percent to close at 7,318.14 points.

Combined turnover on the two bourses on Monday was 176.22 billion yuan ($28.27 billion), up from Friday's 128.21 billion yuan.

The State Council released guidelines for reform, opening-up and stable development of the country's capital markets on Friday after close of trading.

The State Council said in a statement that it would encourage direct financing, facilitate a registration-based IPO system, further open up the capital markets to foreign investors and develop a system for local governments to issue bonds directly.

Monday's rally was led by gains for commodities and financial companies.

Backed by the financial reform drive, brokerages outperformed on Monday. Northeast Securities Co rose by 7.09 percent to 8.01 yuan and Sinolink Securities Co was up by 5.81 percent to 20.20 yuan.

The State Council statement also mentioned the need to develop commodities trading tools, which, combined with a recent rise in commodities prices, boosted investors' expectations for the performance of coal companies. This led to a surge in shares in coal, nonferrous and steel companies on Monday.

Twenty three companies in the coal sector jumped by the daily limit of 10 percent while the overall sector saw an increase of 7.71 percent.

SDIC Xinji Energy Co and Shaanxi Coal Industry Co soared by 10 percent to 3.15 yuan and 4.48 yuan, respectively.

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, rose by 19.70 points or 1.57 percent to 1,278.28 points on Monday.