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Chinese shares surged on Monday, with the market gaining confidence from the central bank's latest move to expand a pilot program to ease monetary flows by cutting loan costs.
The benchmark Shanghai Composite Index was up 3.28 percent to end at 3,287.66 points on Monday. The Shenzhen Component Index rose 4 percent to close at 10,961.36 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 4.52 percent to close at 2,316.78 points.
The benchmark Shanghai Composite Index once went up more than 4 percent in the afternoon trading session.
Total turnover on the Shanghai and Shenzhen bourses increased to 925.24 billion yuan (145.9 billion U.S. dollars), up from 596.53 billion yuan on the previous trading day.
Stocks of financial institutions led the growth, with financial service companies including Sunyard System Engineering Co., Ltd and Hundsun Technologies Inc. climbing by the daily limit of 10 percent.
Securities and traffic facility makers also rose robustly during the trading day.
China's central bank on Saturday announced it would expand the pilot program on credit-asset pledged lending to nine municipalities and provinces.
Before this, the scheme was tried out in Shandong and Guangdong, the People's Bank of China (PBOC) said in an online statement.
The nine municipalities and provinces are Shanghai, Tianjin, Liaoning, Jiangsu, Hubei, Sichuan, Shaanxi, Beijing and Chongqing.
The move is expected to cut borrowing costs and guide more funds into agriculture and small enterprises to boost the real economy, the PBOC said.
The policy may not immediately inject a lot of liquidity into the economy, but it has boosted expectations of monetary easing, Wu Kan, head of equity trading at Shanghai-based investment firm Shanshan Finance, was quoted as saying.
Investors were also encouraged by market-soothing comments from deputy central bank governor Yi Gang, saying that China's stock market correction is "almost over."
Stocks rose across the board, buoyed by strong performance of small-caps.
As of Thursday, a total of 1,058 companies listed on the Shanghai and Shenzhen bourses have published the third-quarter profit reports, nearly 60 percent or 632 firms reported profit surge, adding to the market confidence, analysts form Stcn.com said.
The small and medium-sized enterprises' growth was especially eye-catching, with food maker Muyuan Company Limited and Wuhu Shunrong Sanqi Interactive Entertainment Network Technology Co., Ltd. forecasting net profits to increase by more than 100 fold.
Sectors including electric vehicle charging station, modern agriculture, "Made in China 2025" related stocks gained momentum and expanded transaction revenues.
China's consumer price index (CPI), a major gauge of inflation, is predicted to increase 1.8 percent from a year earlier in September, slower than a 2.0 percent rise pace in August, according to analysts' forecast polled by Xinhua.
A lower CPI reading may lead to more monetary easing of reserve requirement ratio and interest rate cuts over the next few months as China's economy is faces huge growth pressure.
China's National Bureau of Statistics is scheduled to release September CPI data Wednesday.
The consumption spree during China's National Day holiday from Oct. 1- 7 showed the economic fundamentals of the world's second largest economy remain solid.
About 526 million Chinese travelled during the week-long National Day holiday which ended on Wednesday, up 10.7 percent from the same period last year. They contributed to a massive sum of 421 billion yuan in tourism revenue, up 17.9 percent year on year.
Compared with investment and exports, consumption has been a less conspicuous growth driver for China in past decades, but it is catching up fast.
In the first half of 2015, it contributed more than 60 percent of economic growth, evidence of the success of China's restructuring. In particular, new consumption models such as online shopping have accounted for nearly 10 percent of overall retail sales, and consumption in tourism and healthcare are expected to rise at a faster pace as society prospers.
China's improving industrial structure, innovation and entrepreneurship, warming property market, interest rate liberalization and wider opening-up in 2015 denoted a long-term steady growth will continue to maintain.
Globally, the U.S. Fed's interest rate hike prospect was shadowed by the largest expansion in U.S. trade deficit in five months. The U.S. international trade deficit in goods and services rose to 48.3 billion dollars in August from revised 41.8 billion dollars in July.
It is still immature for a U.S. interest rate hike, Chinese Finance Minister Lou Jiwei said at the World Bank Group and International Monetary Fund Annual Meetings in Lima on Friday, adding that the U.S. economy benefits from the dominance of the U.S. dollar and should shoulder more responsibility.
