The Shanghai Composite index ended 1.82% higher at 2,996.76 after swinging between losses and gains earlier in the session. Despite the gains, the index remains down more than 2.5% from last week's highs.
SHANGHAI: Chinese shares closed higher on Tuesday as new coronavirus cases in the mainland tumbled and as President Xi Jinping's visit to the virus' epicentre lifted sentiment, while weak data raised hopes for more policy measures to support the economy.
The Shanghai Composite index ended 1.82% higher at 2,996.76 after swinging between losses and gains earlier in the session. Despite the gains, the index remains down more than 2.5% from last week's highs.
The blue-chip CSI300 index was up 2.14%, with its financial sector sub-index higher by 1.66%, the consumer staples sector up 2.32%, the real estate index up 1.2% and the healthcare sub-index up 0.67%.
Xi's first visit to Wuhan since the epidemic follows a sharp drop in new cases in mainland China in the past week, with 19 new infections by Monday, down from 40 a day earlier.
Falling infection cases and resumed economic activity "should support our relative optimism on A shares in a regional context, which rests on the premise that policy accommodation and positive flows factors should outweigh the COVID-19-related growth disruptions, hence driving moderate multiple expansion for A shares," Goldman Sachs analysts said in a note.
Data showed producer prices swung back into deflation territory in February as the epidemic slowed economic activity, raising the prospect of more policy stimulus even as consumer inflation stayed elevated on high food costs.
The smaller Shenzhen index ended up 2.43% and the start-up board ChiNext Composite index was higher by 2.663%.
Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.33%, while Japan's Nikkei index closed up 0.85%.
At 0715 GMT, the yuan was quoted at 6.942 per U.S. dollar, 0.09% firmer than the previous close of 6.948.
The largest percentage gainers on the main Shanghai Composite index were Hubei Chutian Smart Communication Co Ltd, up 10.13%, followed by Lanhai Medical Investment Co Ltd, gaining 10.1% and Hengtong Logistics Co Ltd, up by 10.06%.
The largest percentage losers on the Shanghai index were Nanjing Chemical Fibre Co Ltd down 10.07%, followed by Aucma Co Ltd losing 10.04% and Shenma Industry Co Ltd down by 10.01%.
So far this year, the Shanghai stock index is down 1.7% and the CSI300 has fallen 0.3%, while China's H-share index listed in Hong Kong is down 8.7%. Shanghai stocks have risen 4.04% this month. - Reuters
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