China Stocks Soar: A Bullish Start to the Lunar New Year

On Monday, China and Hong Kong stocks experienced their most significant surge in a month, inspired by record-breaking advances on Wall Street and bullish Asian markets, especially in Japan.

Analyst agencies advise investors to hold their stock positions as the upcoming Lunar New Year approaches, believing the market correction that brought China's market down by over 4% from its January 29 peak is coming to a close.

China's blue-chip CSI300 Index and the Shanghai Composite both rose by over 1%, while Hong Kong's Hang Seng increased by 1.8%, buoyed by heightened risk appetite after Wall Street's Dow Jones Industrial Average closed above the 50,000 mark for the first time on Friday.

Japanese stocks hit record highs following Sanae Takaichi's electoral success on Sunday, further boosting sentiment. Brokerages, including Caitong Securities, suggest that stock turnover is decreasing as the holiday nears, signaling the end of the correction and potential rewards for those holding stocks.

Media, entertainment, and film production stocks led gains as investors anticipated increased holiday spending. Real-world asset-related stocks like Guotai Junan International and GCL Energy Technology also rose on expectations of benefiting from Beijing's new legal framework for RWA tokenisation.

Moreover, the UBS SDIC Silver Futures fund rebounded by 8% following a challenging week of losses, spurred by a bounce in metal prices. Gold-linked stocks in China and Hong Kong improved after China's central bank's prolonged gold purchasing spree continued into January for the 15th month.