Market Surges 0.62% as Construction, Energy Stocks Hit Daily Limits

The market experienced a significant surge on July 22, with 2540 stocks rising and 112 stocks hitting their daily limit. The construction and energy sectors saw substantial gains, with stocks such as China Energy Engineering Corporation, China Power Construction Corporation, and China Communications Construction Corporation all reaching their daily limit. This surge was driven by a combination of factors, including strong performance in the construction and energy sectors, as well as positive news from the government regarding the expansion of the basic pension fund's investment scale.

The market's overall performance was robust, with the Shanghai Composite Index rising by 0.62%, the Shenzhen Component Index increasing by 0.84%, and the ChiNext Index gaining 0.61%. The construction sector, in particular, saw a significant boost in the afternoon, with stocks like China Communications Construction Corporation and China Railway Equipment Corporation leading the charge. Other notable performers included China National Building Materials Group, China National Nuclear Corporation, and China National Coal Group, all of which reached their daily limit.

The financial sector also saw notable gains, with brokerage stocks such as Xingye Stock, Silver Star, and CITIC Securities experiencing significant increases. This surge was likely driven by positive market sentiment and the anticipation of further economic stimulus measures.

The surge in the market was also supported by positive news from the government. The Ministry of Human Resources and Social Security announced plans to expand the investment scale of the basic pension fund, which is expected to provide additional liquidity to the market. This news, combined with the strong performance of key sectors, contributed to the overall market rally.

On the same day, the market received a significant boost from news that the market regulatory authority had temporarily suspended its anti-monopoly investigation into DuPont China Group Co., Ltd. This decision came after the U.S. President announced tariffs on Chinese goods in early April, leading to a sharp decline in DuPont's stock price. The suspension of the investigation is seen as a positive development in the ongoing trade tensions between the two countries, and it has been welcomed by investors.

In addition to the suspension of the investigation into DuPont, there were other positive developments in the trade relationship between the two countries. China's exports of rare earth magnets to the U.S. surged in June, reaching seven times the volume of May. This increase is seen as a sign of the strong recovery in the supply of key minerals needed for electric vehicles and wind turbines, following the trade agreement between the two countries. China is the world's largest producer of rare earth magnets, accounting for over 90% of global supply. In April, China added several rare earth products to its export control list in response to U.S. tariffs.

Analysts expect that the export volume of rare earth magnets will continue to rise in July as more exporters obtain the necessary permits. The overall export volume of rare earth magnets in June was 3188 tons, a 157.5% increase from May's 1238 tons. However, this is still 38.1% lower than the same period last year.

In summary, the market's surge on July 22 was driven by a combination of factors, including strong performance in key sectors, positive government news, and a surge in commodity prices. This rally is expected to have a positive impact on the overall market sentiment and provide additional support for future growth. The suspension of the anti-monopoly investigation into DuPont and the increase in rare earth magnet exports to the U.S. are seen as positive developments in the trade relationship between the two countries, and they have been welcomed by investors.