Chinese shares climb up higher Monday

Chinese stocks rebounded and closed higher on Monday, with the benchmark Shanghai Composite Index up 1.22 percent to close at 2,630.52 points.

The Shenzhen Component Index closed 2.4 percent higher at 7,832.29 points. Investors were encouraged after the Chinese government ramped up its support for private enterprises over the weekend, rolling out a series of measures, including a simplified process for listed companies to buy back shares, announced the China Securities Regulatory Commission on Friday.

Also, China will study and implement tax cuts of a larger scale with more significant fee reductions for companies, Finance Minister Liu Kun said on Monday, after the State Administration of Taxation’s chief said that the department is planning more tax cuts to back the private sector.

“The A-share market is entering its latter phase of a corrective rebound,” said the analysts. “We will focus on high quality growth stocks in artificial intelligence, 5G, cloud computing and chipmaking, and blue chips in the financial, real estate and pharmaceutical sectors.”

But investors at home and abroad are still cautious, said Steven Leung, head of sales at the brokerage UOB Kay Hian.

With the introduction of new policy measures, risk appetite is on the rise in the Chinese equity market, the analysts said.