China A-shares Hit 10-Year High on Deposit Migration
China A-shares surged to a near 10-year peak as the Shanghai Composite Index broke above 3741 points. China A-shares performance was powered by deposit migration: in July, non-bank deposits climbed to RMB 2.14 trillion. Lower deposit rates have pushed investors to seek higher returns, funneling liquidity into stocks. The Shenzhen Component and ChiNext indexes also hit multi-month highs. Technology themes—especially AI, semiconductors, and data center stocks—led gains, reflecting China’s push in large language models and compute power. However, ongoing global uncertainties and a sluggish property sector call for caution. Investors should research carefully to avoid buying at peaks. The near-term bull market outlook remains strong, but long-term stability depends on policy direction and economic fundamentals.
Bullish
The deposit migration phenomenon mirrors past liquidity-driven rallies, notably the 2015 A-shares boom. As bank deposit rates fall, retail and non-bank funds flood into equities, lifting indices. AI and technology sectors have further amplified bullish sentiment by leading gains. Historically, similar surges delivered strong short-term returns but faced swift corrections when liquidity conditions tightened. Traders can expect near-term bullish momentum and may buy on dips. Yet macro uncertainties and a weak property market could limit long-term upside. Market stability will depend on sustained policy support, balanced sector rotation, and ongoing economic reforms.