China’s Stocks, Yuan Roars as Trading Reopens After Holiday Break

Investors in Chinese stocks are growing more confident that Joe Biden will win in the U.S. presidential election.
Steven LernerOct 09,2020,18:56

China’s stock market and currency soared as trading resumed after the eight-day Golden Week holiday.

The yuan strengthened by 1.45% on mainland exchanges, its biggest jump since 2005, mirroring a similar increase in the yuan in offshore markets this week.

The CSI 300 index shot up 2% on Friday and the Shanghai Composite Index increased by 1.68%.

Shares of solar companies flourished after President Xi Jinping pledged that China will be carbon neutral by 2060. Ningbo Ronbay New Energy Technology Co (SHA: 688005) climbed 20% on the news. Renewable energy provider JinKo Power Technology (SHA: 601778) finished 10% higher. The stock price for solar manufacturer Longi Green Technology (SHA: 601012), which increased by 9.32% on Friday, is up more than 200% this year.

Ahead of Apple’s new iPhone launch next week, shares of Chinese technology companies that provide parts for the device surged. Glass screen maker Lens Technology Co (SHE: 300433) rose by 11% on Friday, and electronic manufacturer Luxshare Precision (SHE: 002475) grew by 7%.

Other big winners on Friday include Contec Medical Systems (SHE: 300869) and Beijing Easpring Material Technology (SHE: 300073), with both stocks up 20%.

As the markets in China grew on Friday, it wasn’t the case throughout Asia-Pacific. Markets in Japan and Singapore ticked down. Stocks in Hong Kong struggled on Friday due to a concerning spike in coronavirus cases.

Investors in Chinese stocks are growing more confident that Joe Biden will win in the U.S. presidential election, particularly with a string of new polls favoring the former vice president.

Domestically, the Caixin China General Services purchasing managers’ index jumped from 54 to 54.8 this month, showing increased confidence in the economy.

A sign of that economic recovery is the fact that 600 million trips were completed during the holiday break. Despite the positive travel news, shares of China Tourism Group Duty Free Corp. (SHA: 601888) collapsed by 8% on Friday.

Topics:stocks, yuan