China's CSI 300 Index rose above 4000 for the first time, driven by a surge in new investors who are ignoring warnings of a bubble to enter a market that's doubled this year. China Merchants Bank Co. paced the gain.
The benchmark CSI 300, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 105.32, or 2.6 percent, to 4090.57 as of 1:23 p.m. local time. Investors opened more than 300,000 accounts a day last week, even as former Federal Reserve Chairman Alan Greenspan called the rally unsustainable and said the market may undergo a ``dramatic contraction''.
Merchants Bank, the nation's third-biggest publicly traded lender, rose 0.41 yuan, or 1.9 percent, to 21.53. China Petroleum & Chemical Corp., Asia's biggest oil refiner, also known as Sinopec, jumped 0.59 yuan, or 4.8 percent, to 12.99. China International Marine Containers Co., the world's largest maker of freight containers, gained 3.17 yuan, or the 10 percent daily cap, to 34.82
Households are shifting funds into the stock market, seeking better returns than they can get on their bank deposits. The central bank's benchmark one-year deposit rate, a ceiling for deposit rates commercial banks can offer, is 3.06 percent, little more than the nation's 3 percent inflation rate. The CSI 300 has risen 198 percent in the past year.