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China: Stocks post strong gains despite warning against "irrational exuberance"
[SHANGHAI] China stocks jumped on Tuesday as bullish investors piled into small-cap stocks, betting on further gains despite stretched valuations and a warning from official Xinhua News Agency against "irrational exuberance."
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.2 per cent to 4,619.16 points, while the Shanghai Composite Index gained 1.8 per cent to 4,293.62 points.
Shenzhen's Nasdaq-style start-up board ChiNext surged over 5 per cent. "China's economic restructuring needs support from a healthy capital market, but such support should be in the form of a slow and long bull (market), based on improvement in corporate earnings," a Xinhua article said.
Trading on the Shanghai Stock Exchange surpassed 1 trillion yuan (S$218 billion) for the first time on Monday, as China's stock trading fever made the bourse the world's biggest in terms of turnover, surpassing the New York Stock Exchange.
Brokerage shares were among market leaders on Tuesday as investors bet the industry will benefit from surging trading.