(Yicai) Oct. 8 -- Stock markets in China surged on the first trading day after the National Day holiday, extending gains that began before the week-long break.

The Shanghai Composite Index [SHA: 000001] closed up 4.6 percent at 3,489.78 points and the Shenzhen Component Index [SHE: 399001] climbed 9.2 percent to 11,495.10. CNY3.45 trillion of shares changed hands on the two bourses, rising above CNY3 trillion for the first time and beating the CNY2.6 trillion record set on Sept. 30. The ChiNext Index [SHE: 399006] rose 17.3 percent to 2,550.28.

The shares of more than 5,000 mainland-listed companies, or over 90 percent of those publicly traded, rose today. More than 800, mostly brokerages and chip-related firms, rose by the intraday limit, including chip foundry Semiconductor Manufacturing International [SHA: 688981], which soared 20 percent to CNY71.99 (USD10.20) a share. Internet broker East Money Information [SHE: 300059] also closed up 20 percent, at CNY24.36.

The People's Bank of China unveiled a big economic stimulus package on Sept. 24, including a cut to the reserve requirement ratio and lower rates on existing mortgages. That triggered a stellar market recovery, with the Shanghai Composite, Shenzhen Component, and ChiNext indexes having since added 27 percent, 42 percent, and 67 percent, respectively.

There were wild trading swings as well today. The Shanghai Composite saw an early increase of 10 percent, but later pared that to 1 percent, with an intraday fluctuation of more than 300 points.

"The market is in need of technical adjustments after a period of increases, and some investors may now opt for profit taking," Pan Jun, an investment manager at private equity fund Cheese Investment, told Yicai.

But market sentiment remains upbeat. “During the National Day holiday, a record number of investors opened broker accounts,” Pan noted. The increase in retail investors is important because they constitute a significant share of trading activity in the Chinese stock market.

“Also, the PBOC's more-than-expected RRR and interest rate cuts provide the market with abundant liquidity, and investors still have expectations for more favorable policies later,” Pan added.

Editor: Tom Litting