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Monday, July 4, 2022
Stocks & Shares

China stocks higher after meeting on stabilising economy

China stocks

The CSI300 index rose 0.6% to 4,007.09, while the Shanghai Composite Index gained 0.7% to 3,127.81

China stocks closed morning trade higher on Thursday after struggling for direction for most parts of the session, as investors weighed comments from Premier Li Keqiang at a nationwide meeting on stabilising the slowing economy.

The CSI300 index rose 0.6% to 4,007.09 by the end of the morning session, while the Shanghai Composite Index gained 0.7% to 3,127.81.

The Hang Seng index dropped 0.1% to 20,145.80. The Hong Kong China Enterprises Index lost 0.2% to 6,887.04.

We should strive to ensure reasonable economic growth in the second quarter, lower the unemployment rate as soon as possible, and keep economic operations within a reasonable range, the official Xinhua news agency quoted the premier as saying on Wednesday.

First, he mostly delivered a sombre message on how bad the economy has deteriorated, said Jason Hsu, founder, and CIO of Rayliant Global Advisors. Whatever commitment to focus on aiding the economy is interpreted by the market, it is cheap talk. Until substantial rate cuts occur and actual fiscal stimulus packages are announced, investors will mostly ignore ‘talks’.

China issued guidelines to expand infrastructure investment by freeing up capital locked in existing projects, using tools such as real estate investment trusts (REITs).

The new measures helped real estate developers and construction engineering companies to climb more than 2% each.

Defence stocks jumped 4.3% on rising geopolitical tensions, as China’s foreign ministry said the U.S.-backed Indo-Pacific Economic Framework for Prosperity (IPEF) plan seeks to decouple countries from the Chinese economy.

Meanwhile, auto stocks lost 1% as data showed manufacturers sold more vehicles than last month but fewer than a year before due to the virus outbreak.

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