Sunday, July 3

China stocks rise on stimulus, Shanghai reopening; COVID uncertainty lingers


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SHANGHAI — China stocks closed higher amid choppy trade on Thursday, as initial euphoria over additional stimulus measures to support an ailing economy countered investor concerns over potential rebound in cases and the zero-COVID policy.

The blue-chip CSI300 index rose 0.2%, to 4,089.57, while the Shanghai Composite Index gained 0.4% to 3,195.46 points.

** China’s cabinet said on Wednesday it will increase the credit quota for policy banks by 800 billion yuan ($120 billion) for them to support infrastructure construction.

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** “With frequent measures introduced to support the economy, A-shares recorded their biggest rebound in May since the correction,” said Chen Mengjie, chief strategist at Yuekai Securities, as the Shanghai Composite Index jumped 4.6% in May, the biggest monthly rise in a year.

** “The market might see range-bound performance in June, but we are not pessmistic, the darkest hour has passed.”

** China’s cabinet announced a package of 33 measures covering fiscal, financial, investment and industrial policies on Tuesday to revive its pandemic-ravaged economy.

** Shanghai sprung back to life after the financial hub lifted most anti-COVID curbs, but worries over a rebound of cases and the zero-COVID policy lingered.

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** “Due to still-elevated COVID-related uncertainty, we see big downside risks to our current annual GDP growth forecast of 3.9% for 2022,” said Nomura in a note.

** China will aim to ensure that its grids source about one third of power from renewable sources by 2025, up from 28.8% in 2020, the state planning agency said on Wednesday in a new “five-year plan” for the renewable sector.

** New-energy shares rose 2.4%, semiconductors jumped 4.1%, while real estate developers lost 1.6%, and energy stocks dropped 2.4%.

(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips and Uttaresh.V)



financialpost.com