SHANGHAI, Nov 10 (Reuters) - China’s blue-chip index extended its rally on Friday to close at a 27-month high, encouraged by Beijing’s move to lift foreign ownership limits on financial firms and defying a wider global selloff in equities.
The Chinese government on Friday said it will raise foreign ownership limits in domestic financial firms, a long-anticipated step that grants greater access to overseas investors in the Asian giant’s financial services market.
Vice finance minister Zhu Guangyao said on Friday the time was right for world’s second biggest economy to step up liberalisation of its financial sector.
“The further opening up will help enhance competitiveness of Chinese financial sector by embracing fuller foreign competition,” Wu Kan, head of equity trading at Shanshan Finance, adding the move could also help channel more overseas money into China’s stock market.
The market was also encouraged by the outcome of Trump-Xi summit which saw the signing of about $250 billion in commercial deals.
The blue-chip CSI300 index rose 0.9 percent, to 4,111.91 points, while the Shanghai Composite Index added 0.1 percent to 3,432.67 points.
For the week, CSI300 gained 3 percent, its best in a year, while SSEC was up 1.8 percent.
The run-up was bolstered by recent data suggesting growth in the world’s second largest economy remains robust.
China’s producer prices were surprisingly strong in October, while consumer inflation picked up pace, easing market concerns of a slowdown in demand.
“Negative factors (in the economy) including debt, bad loans at banks, ‘zombie firms’, problems in property sector and overcapacity should have been pretty much priced in the stock market,” Gao Shanwen, chief economist at Essence Securities, wrote in an article.
For the week, the consumer sector far outperformed with a 5.6 percent gain, powered by Kweichow Moutai scaling a new peak. Shares in the world’s most valuable liquor maker have more than doubled this year.
New China Life Insurance surged 9 percent on Friday, leading the gains in the financial sector, as Beijing lifts foreign ownership limits on financial firms.
In signs of continued interest in major firms with solid growth, an index tracking top firms listed in Shanghai has gained 3.2 percent this week, its best since last July. (Reporting by Luoyan Liu and John Ruwitch; Editing by Sam Holmes)