North India Statesman
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Ahmedabad: Due to tension between Iran and Israel, heavy selling is being seen in the Indian stock markets. On the other hand, the market cap of the Chinese and Hong Kong stock exchanges increased by almost $3.2 trillion in just 15 trading days due to government support. The surge comes after a number of key economic measures by China, including recent interest rate cuts and measures to provide financial support to sectors facing challenges.
China's total market capitalization rose to $10.1 trillion as of October 2, from $7.95 trillion two trading weeks earlier on September 13. During this period, the market capitalization of the Chinese market increased by almost $2 trillion, which is equivalent to the market capitalization of Switzerland, South Korea and Australia.
Hong Kong's market capitalization has increased from $4.79 trillion to $6 trillion during this period. It has increased by more than $1.25 trillion in the last 15 trading days. This increase is equal to the market cap of countries like Sweden, Netherlands, UAE, Denmark, Spain and Indonesia.
Share prices of about 37 companies on the Shanghai Composite Index have increased by more than 100 percent, while shares of more than 200 companies have increased by 40 to 87 percent since the economic measures were announced in China. On the Hongseng index, 19 companies have registered an increase of 50 to 100 percent, while the shares of 50 companies have seen an increase of 10 to 40 percent.
China's central bank, the People's Bank of China, has reduced the country's key interest rate from 1.7 percent to 1.5 percent. Also, the RRR for banks was reduced by 0.50 percent, adding about 1 trillion yuan, or about $142 billion, of liquidity to the economy. These measures are expected to reduce housing loan rates by an average of 0.50 percent, benefiting approximately 5 million households and saving them approximately 150 billion yuan in interest.
The CSI 300 index rose 21 percent during the month of September, its biggest gain since 2014. The Shanghai Composite is up 17 percent, its best since 2015, and the Hong Kong index is also up 17 percent, its best since November 2022.
