China stocks up on Shenzhen index expansion, industrial upgrade plan
SHANGHAI May 20 (Reuters) - China stocks climbed on Wednesday, energised by a surge in tech-heavy, Shenzhen-listed shares after the city's bourse dramatically expanded the number of firms in a benchmark index.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.5 percent to 4,754.92, and the Shanghai Composite Index gained 0.7 percent to 4448.29 points.
Shenzhen's indexes, including the main board, the SME board for small- and medium-sized enterprises, and the ChiNext board for start-ups all gained over 2 percent to record highs.
The Shenzhen Stock Exchange on Wednesday increased the stocks in the Shenzhen SE Component Index to 500 from 40, boosting the weighting of tech companies at the expense of financial and real estate firms.
Tech-related stocks also got a boost from Beijing's ambitious "Made in China 2025" strategy published on Tuesday. It paints China's next stage of economic ascent, from low-value manufacturing to a world of prosperity spanning space, e-commerce, green energy and bioengineering.
"To those who were previously dumbfounded by the meteoric rise in tech stocks, it's very clear now that the government is counting on this very sector to help China's economic recovery, and transformation," said David Dai, Shanghai-based investment director at Nanhai Fund Management Co.
"Is there a bubble? Of course there is. But this how you can guide resources into high-tech companies to fund very expensive innovation."
The Shanghai Stock Exchange has proposed to launch a board for companies in emerging industries. (Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk)
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