China’s stock benchmark has ended above its 2015 bubble high, marking a recovery from one of the country’s worst equity crashes.

The CSI 300 Index rose 1.9 percent to close at 5,368.50 on Tuesday, surpassing the 5,353.75-point mark from June 8, 2015. That is its highest since 2008. The gauge has surged more than 50 percent since a low in March last year, a rally that accelerated after rules made it easier to buy stocks using borrowed money. That advance helped push the value of China’s domestic to a record US$11 trillion.

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China’s stock benchmark outpaced MSCI Inc’s global benchmark by the most in six years in 2020, with savers funneling cash into thousands of new stock funds after some popular wealth products suffered their first-ever losses

China’s stock benchmark outpaced MSCI Inc’s global benchmark by the most in six years in 2020, with savers funneling cash into thousands of new stock funds after some popular wealth products suffered their first-ever losses. The bullishness was reinforced by a strong currency, as well as data showing China’s economy was rebounding faster than other major economies from the virus pandemic.

After Chinese stocks peaked in 2015, a tumble over the next three months erased more than US$5.2 trillion in value as sellers scrambled to liquidate margin trades. Policymakers took some steps to slow the rally in July last year, after a sudden rally and a surge in turnover invited comparisons to the start of China’s last stock bubble.

This time the gains will be more sustainable, according to market watchers. Citigroup Inc analysts including Pierre Lau raised their target for the CSI 300 Index to 5,525 points, while Morgan Stanley analysts including Laura Wang set a year-end target of 5,570 for the gauge.

The benchmark Shanghai Composite Index closed up 0.73 percent at 3,528.68 points on Tuesday. The Shenzhen Component Index closed 2.16 percent higher at 15,147.57 points.

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The outstanding value of margin debt on the nation’s stock exchanges rose by 23.9 billion yuan (US$3.7 billion), the biggest gain since July 13, according to Bloomberg-compiled data as of Monday. That took the total amount past 1.5 trillion yuan for the first time in five years.

One attraction for investors now is that stocks look cheaper than at the height of the bubble in 2015. The CSI 300 Index is trading at 16 times estimated forward earnings, compared to a multiple of more than 19 back then.

With Xinhua inputs