China’s equity market is firmly in the spotlight after an almost unprecedented rally that helped lift global stocks to a one-month high.

The speed of the past week’s gains in China is in many ways unseen since the stock bubble that burst five years ago. Monday’s surge alone added more than US$460 billion to Chinese stock values, behind just one day in July 2015 as the biggest increase in shareholder wealth since the global financial crisis. A 9.1-per-cent jump in SSE 50 Index futures at Monday’s close signaled gains are likely to continue.

China’s state media struck a more measured tone on Tuesday, after earlier publishing commentaries that highlighted the case for buying shares. Two newspapers urged investors to be rational: the Securities Times — one of China’s most widely-circulated financial publications — said investors should be mindful of potential risks and not use the market as way to make a fortune overnight.

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Mainland traders are counting on the momentum to continue, increasing the amount of leverage in the equity market to almost 1.2 trillion yuan (US$171 billion), the highest since late 2015. The bullish sentiment is also helping lift the yuan, with the offshore rate strengthening past seven per dollar for the first time since March. FTSE China A50 Index futures added 1.7 per cent as of 9:10 a.m. in Singapore.

As China’s tight capital controls limit the investment options for the country’s savers, this year’s low interest rates and the first losses ever for some popular wealth-management products are driving retail investors to stocks. But some analysts, as well as mainland media, say the country’s economic recovery and the government’s handling of the coronavirus outbreak have helped underpin the rally.