Shanghai's market breaks through the 5.000 points benchmark
While Wall Street closed Thursday trading down 0.4% and the Federal Reserve pumped an additional 17 billion US dollars in China the stock market capped a bull run, with the Shanghai Composite Index hitting 5,000 points for the first time while Hong Kong shares rallied to a three- week high.
In the record-breaking rally, the Shanghai index closed 1.05% higher at 5,032.494 points, after setting a new intraday record of 5,050.383. The CSI 300 index climbed to 5,135.93 points, up 84.24 points or 1.67%, despite Tuesday's interest rates increase, which was partly aimed at slowing the continuing share rally. "The interest rates hike did no harm to the market. People are still optimistic because they think there will be no more government tightening before the congress meeting in October" said strategist Linus Yip Sheung-chi of First Shanghai Securities referring to the 17th Congress of the Chinese Communist Party. The rise was greeted with euphoria by Chinese investors, millions of whom have flooded into the stock market for the first time this year in one of history's fastest shifts of money into equities. The Shanghai Composite Index ended last year at 2,675 points and closed the previous year at 1,161. The bull run and the listings of many of China's top firms, have added a staggering 2.5 trillion US dollars to the value of the Shanghai and Shenzhen markets since the start of 2006. Thursday's milestone was passed three months to the day after former U.S. Federal Reserve chairman Alan Greenspan, echoing the fears of some foreign economists and officials, warned China's market had risen too fast and was heading for a "dramatic contraction". At that time, the index was at 4,173 points.