China market surges to seven-year high

Mainland China equity market advanced to seven-year high on Tuesday, 21 April 2015, on expectations monetary stimulus will bolster the economy after the central bank decision to cut the cash reserve ratio for banks. But, market gain was limited amid concern about steps by government to curb margin trading. Shanghai Composite Index rose by 76.55 points, or 1.82% to 4293.62 at the close, off an intraday low of 4188.57. The CSI300 index, the largest listed companies in Shanghai and Shenzhen, jumped 97.24 points, or 2.15%, to 4619.16. Chinese investors have been piling into the equity market after the central bank cut interest rates twice since November and authorities from the CSRC to central bank Governor Zhou Xiaochuan endorsed the flow of funds into equities. The second reduction in reserve ratios this year comes after a report showed the slowest economic growth in six years and on signs capital is leaving China, causing a shortage of liquidity.

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