Chinese Stocks Jump as Beijing Signals More Economic Support

Date: 02 August 2021 - 23:24

News ID: ۹۲۹۵۱

LONDON (Bloomberg) -- Chinese equities rallied by the most in ten weeks as traders turned buyers of everything from baijiu producers to construction firms on expectations of increased support for the economy.
The benchmark CSI 300 Index rose 2.6%, its best day since May 25. Consumer shares led gains, with Kweichow Moutai Co. and Wuliangye Yibin Co. adding at least 4.5%. In Hong Kong, the Hang Seng Index gained 1.1%.
Monday’s move higher follows a much-watched Politburo meeting Friday, which was seen to indicate that authorities will likely take more steps to help struggling small businesses, boost fiscal spending and possibly reduce the reserve requirement ratio for banks again. Bets on further easing boosted Chinese sovereign bonds.
“Some investors are buying dips thinking most of the bad news on regulations is behind them,” said Margaret Yang, a strategist at DailyFX in Singapore. “It has been oversold. The resurgence of virus cases is also aiding hopes that PBOC may ease policy in the second half.”
The gains follow a volatile week for the world’s second-largest equity market, after a ban on swathes of the tutoring industry from making profits sparked concerns that other industries could be targeted.
While China continued to tighten rules on technology firms on Friday, there have been attempts to ring-fence its clampdown, with the securities regulator meeting banks to reassure them.