Decline in trade expected to spur new support measures
The benchmark Shanghai Composite Index surged to a fresh seven-year high on Monday, with investors anticipating further stimulus policies amid the persistent downward pressure on the economy.
The Shanghai Composite Index surged 2.17 percent or 87.41 points to 4,121.72 points on Monday. The Shenzhen Component Index rose by 0.97 percent or 136.17 points to 14,149.50 points.
The CSI 300 Index, which tracks the 300 biggest companies on the Shanghai and Shenzhen bourses, rose 1.76 percent to 4,421.07 points on Monday.
Total transactions on the two bourses reached 1.45 trillion yuan ($232.9 billion), maintaining the high trading volume seen during the past few trading days.
Official data released on Monday showed that China's imports and exports both fell year-on-year in March, spurring expectations that China may further loosen monetary policy to boost the economy.
Some analysts and brokerages believe new support measures will lead to further gains in the stock market.
Guotai Junan Securities predicted that the Shanghai Composite Index will reach 4,600 points this year, news portal aastocks.com reported on Monday.
In Hong Kong, the Hang Seng Index rose 2.73 percent to 28,016.34 points on Monday, given the prospects that the stock-connect program between the Hong Kong and mainland stock markets will be further expanded.
The Shanghai-Hong Kong Stock Connect program was launched in November 2014, and a similar program linking the Hong Kong and Shenzhen bourses is expected to be launched in the second half of this year, Hong Kong-based newspaper Oriental Daily News reported on Monday.
Currently, northbound trade has an aggregate cap of 300 billion yuan and a daily quota of 13 billion yuan. The aggregate southbound trading quota is 250 billion yuan, with a daily quota of 10.5 billion yuan.
The report said that the daily northbound trade quota will be raised to 20 billion yuan and the daily southbound trade quota will be raised to 40 billion yuan, and the overall caps may also be removed.
