SHANGHAI: China’s major stock indexes closed near their 6-1/2-month highs on Monday, as sentiment was bolstered by high expectations of the U.S. Federal Reserve taking a dovish stance at its policy meeting this week and Beijing’s policy boost for growth.
At the close, the blue-chip CSI300 index settled 2.9 percent higher at 3,851.75 points, while the Shanghai Composite Index ended up 2.5 percent at 3,096.42 points.
At close, both indexes were within sight of their highs since late May, 2018.
There is much talk Fed policymakers will lower their interest rate forecasts, or ”dot plots”, to show little or no further tightening this year.
The Chinese government has additional monetary policy measures that it can take to support economic growth this year, and will even cut ”its own flesh” to help finance large-scale tax cuts, Premier Li Keqiang said on Friday.
Li’s comments suggest Beijing is ready to roll out more stimulus measures to ensure the economy grows within a targeted range of 6.0 to 6.5 percent.
”Overall we are very optimistic about China’s stock market and continue to be bullish after the recent recovery,” Laura Wang, China equity strategist at Morgan Stanley, said at a media briefing, citing improvement in corporate earnings, Beijing’s policies to bolster growth and progress in Sino-U.S. trade talks.
There is a 10-15 percent potential upside for the A-share market, she said, recommending that global investors further hike their exposure to Chinese stocks.
Consumer firms led the advance on the mainland, with the CSI consumer staples index closing 6.0 percent higher, as those companies are widely seen as beneficiary of Beijing’s measures to boost domestic consumption.
The sub-index marked its best session since July 10, 2015.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.82 percent, while Japan’s Nikkei index closed up 0.62 percent.
At 07:06 GMT, the yuan was quoted at 6.7106 per U.S. dollar, 0.05 percent firmer than the previous close of 6.714.
The largest percentage gainers in the main Shanghai Composite index were Xining Special Steel Co Ltd, up 10.1 percent, followed by Xinjiang Ba Yi Iron & Steel Co Ltd , gaining 10.09 percent and Zhengzhou Coal Industry & Electric Power Co Ltd, up by 10.09 percent.
The largest percentage losses in the Shanghai index were Zhonglu Co Ltd down 9.97 percent, followed by Zhonglu Co Ltd losing 6.91 percent and Shanghai Feilo Acoustics Co Ltd down by 6.13 percent.
So far this year, the Shanghai stock index is up 24.2 percent and the CSI300 has risen 27.9 percent , while China’s H-share index listed in Hong Kong is up 14.8 percent. Shanghai stocks have risen 5.29 percent this month.
About 39.78 billion shares were traded on the Shanghai exchange, roughly 118.0 percent of the market’s 30-day moving average of 33.72 billion shares a day. The volume in the previous trading session was 34.12 billion.
As of 0708 GMT, China’s A-shares were trading at a premium of 23.83 percent over the Hong Kong-listed H-shares. - Reuters
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