Chinese Stocks Recover All Post-Holiday Losses As Autos, Brokerages Skyrocket. Parliament Delay Pondered

It’s official: Mainland shares in China have recovered all of the losses logged since the harrowing reopen after the extended holiday.

Promises of supportive fiscal measures, higher limits for local government debt issuance, tax breaks, along with cash injections and rate cuts from the PBoC, have combined to bolster market sentiment, even as the virus continues to exact a heavy human toll.

The latest figures show total deaths from the disease at 1,770 in China. Mainland cases rose to 70,548 in the latest data. And yet, A-shares surged 2% or more depending on the benchmark Monday, coming off a weekend of more stimulus promises and following the PBoC’s move to slash the one-year MLF rate by 10bps, setting the stage for the loan prime rate to be cut later this week.

The ChiNext – which had already recouped the entirety of its post-holiday losses – surged nearly 4% to start the week, retaking 2,100 for the first time since the bubble burst in the process.

Measures aimed at making it easier for corporates to raise capital juiced brokerages and a planned push to incentivize auto sales sent the likes of Chongqing Changan Automobile limit-up on the day (the Chinese auto market is mired in a horrific slump).

Meanwhile, The Standing Committee of the National People’s Congress will meet next week to consider delaying the annual meeting of the full parliament due to virus concerns.

For the last 35 years, the meetings have been held in March. Putting it off could mean policy signaling around the economy, military and other key domestic agenda items is delayed.

But, as one law professor at Renmin University in Beijing told Bloomberg, because no major changes were expected this year, the move (which was expected) isn’t all that consequential – especially when you consider the rather daunting downside asymmetry inherent in bringing the leadership together in one place when a deadly virus is still lurking about.


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