Great start to 2020 for stocks

China stocks had a tremendous run-up on the first trading day of 2020, with the coming reserve requirement ratio cut boosting investor confidence.

The benchmark Shanghai Composite Index jumped 1.15 percent to 3,085.2 points. The smaller Shenzhen Component Index soared 1.99 percent to 10,638.82 points, while the startup board ChiNext Composite Index rose by 1.93 percent to 1,832.74 points.

The blue chip CSI300 Index closed 1.36 percent higher at 4,152.24 points to hit a near two-year high.

China's central bank is cutting the reserve requirement ratio for financial institutions — excluding finance companies, financial leasing companies and automobile financing companies — by 50 basis points from January 6, with the aim of supporting development of the real economy as well as reducing the real cost of social financing.

This move is expected to unleash more than 800 billion yuan (around US$115 billion) in long-term funds, according to the People's Bank of China.

Turnover on the two major bourses expanded sharply to 751.5 billion yuan on Thursday compared with the 532.7 billion yuan in the previous session.

Stocks of nearly a hundred listed companies surged by the daily limit of 10 percent.

Overseas capital continued to flow into the mainland market via the Stock Connect schemes linking the Chinese mainland and Hong Kong, posting a net influx of 10.15 billion yuan as of the closing bell on Thursday.

The media sector led the rise, with nearly 20 companies hitting the 10 percent daily cap, including Lecron Industrial Development Group Co, Meisheng Cultural & Creative Corp and Zhongchang Bigdata Corp.

Financial shares were among the big gainers. China Merchants Bank Co and Bank of Ningbo Co both rose over 3 percent, while brokerages such as Kunwu Jiuding Investment Holdings Co, Panda Financial Holding Corp and Liaoning Chengda Co all gained the maximum 10 percent.

Electronic component firms, computer companies and the agriculture, forestry, animal husbandry and fishery sector all performed strongly.

On the STAR Market, 62 of the 70 listed companies rose, the others posting declines.