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Asia, News

China’s blue-chip index hits five-year high on hopes of recovery, stimulus

SHANGHAI, July 3 (Reuters) – China stocks rose for a fourth straight session on Friday, with the blue-chip index scaling a five-year high on hopes of recovery in the world’s second largest economy as Beijing rolled out more stimulus.

** The Shanghai Composite index closed up 2.01% at 3,152.81, while the blue-chip CSI300 index climbed 1.93% to 4,419.60 points, its highest since July 1, 2015.

** The smaller Shenzhen index ended up 1.28% and the start-up board ChiNext Composite index rose 1.574%.

** For the week, SSEC rose 5.8%, its best since March 2019, while the CSI300 gained 5.8%, its best since November 2015.

** China’s services sector expanded at its fastest pace in over a decade in June as the easing of coronavirus-related lockdown measures revised consumer demand, a private survey showed on Friday, though companies continued to shed jobs.

** The rebound suggests China’s overall recovery is becoming more balanced and broader based as life slowly returns to normal, though analysts believe it will take months for activity to return to pre-crisis levels.

** Market participants expected Beijing to roll out more stimulus in the second half if needed following the PBOC’s latest rate cuts.

** Investors are also turning to traditional heavyweights with lower valuations than growth stocks, including coal, nonferrous metals, insurance and real estate companies, China Central Securities’ analyst Zhang Gang said.

** Securities shares surged as trading activity jumped and the media reported a merger deal between leading players.

** The CSI SWS securities index surged 8.1% and is up 17.8% this week.

** Further helping the rally were robust foreign inflows via the Stock Connect linking Hong Kong and mainland, with turnover via the northbound legs of the link hitting a record high on Thursday.

** Around the region, MSCI’s Asia ex-Japan stock index rose 1.11% while Japan’s Nikkei index closed up 0.72%.

** At 0716 GMT, the yuan was quoted at 7.0641 per U.S. dollar, 0.03% firmer than the previous close of 7.066. (Reporting by Shanghai Newsroom; editing by Jason Neely)


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