April 1, 2019 / 7:45 AM / 2 months ago

Shanghai benchmark index hits 10-month high on signs of China recovery

* SSEC, CSI300 up 2.6 pct; gains across the board

* Factory activity grows again; home prices seen higher

* Tariffs on hold, talks to resume on U.S.-China trade

HONG KONG, April 1 (Reuters) - China stocks jumped on Monday with the Shanghai Composite Index hitting its highest in 10 months, while blue-chips touched a one-year peak, on long-awaited signals of an economic recovery and the progress in Sino-U.S. trade talks. ** The Shanghai Composite Index closed up 2.6 percent at 3,170.36, its highest point since May 2018. ** The blue-chip CSI300 index rose 2.6 percent to 3,973.92, a level not seen since March 2018. ** Trading volume in Shanghai was the highest in almost three weeks. About 46.61 billion shares were traded on the Shanghai exchange. The volume in the previous session was 37.51 billion. ** Factory activity in China unexpectedly grew for the first time in four months in March, official and private surveys showed, suggesting government stimulus measures may be starting to take hold. ** The private survey’s findings showed factories hired workers in March for the first time in over four years, arresting a relentless spell of job shedding since October 2013. ** Although recent data shows recovering demand, it will take time to establish whether support from government stimulus is sustainable, analysts at Huatai Securities wrote in a note. “We believe the second quarter will be an observation period for the impact of counter-cyclical policies,” they said. ** China’s State Council said on Sunday the country would continue to suspend additional tariffs on U.S. vehicles and auto parts after April 1, in a goodwill gesture following a U.S. decision to delay tariff hikes on Chinese imports. The news came shortly before Chinese Vice Premier Liu He’s scheduled visit to Washington to resume trade talks this week. ** Real estate shares rallied 3.4 percent after a Reuters poll showed home prices in China are expected to rise more this year than predicted just a few months ago, as Beijing urges banks to ramp up lending and lower interest rates to boost growth. ** “Chinese equities are leading global peers and showing significant slowdown in downward revision,” analysts at Morgan Stanley, who expect the CSI300 to trade close to 4,300 by December, wrote in a memo on Monday. “They are on track to become the first batch to go back into positive revisions.” ** CSI300’s financial sub-index climbed 2 percent, the consumer staples sector was up 1.7 percent, and healthcare shares rose 2.2 percent. ** The smaller Shenzhen index ended up 3.6 percent and the start-up board ChiNext Composite index was higher by almost 4 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by close to 1 percent, while Japan’s Nikkei index closed up 1.4 percent. ** So far this year, the Shanghai stock index has gained 27.1 percent and the CSI300 has risen almost 32 percent. ** As of 07:03 GMT, China’s A-shares were trading at a premium of 24.73 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is above its 50-day moving average and above its 200-day moving average. (Reporting by Noah Sin; Editing by Gopakumar Warrier)

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