October 8, 2019 / 7:44 AM / 12 days ago

China stocks rise on stimulus hopes, trade anxiety curbs gains

* SSEC +0.3%, CSI300 +0.6%

* China services sector growth falls to 7-month low - Caixin PMI

* U.S.-China trade deal hopes dim as talks get underway in tense atmosphere

SHANGHAI, Oct 8 (Reuters) - China stocks ended higher on Tuesday, as a dim services sector survey reinforced hopes that Beijing will roll out more stimulus measures, though uncertainties around Sino-U.S. trade talks curbed gains.

The country’s markets on Tuesday re-opened after a week-long holiday.

** The blue-chip CSI300 index rose 0.6% to close at 3,837.68, while the Shanghai Composite Index added 0.3% to end at 2,913.57.

** China’s services sector grew at its slowest pace in seven months in September despite a strong increase in new orders, as operating expenses continued to rise at the end of the third quarter, a private survey showed.

** Services account for more than half of China’s economy, providing a key buffer, as persistent trade tensions with the United States weigh heavily on the country’s manufacturing sector.

** “We continue to be optimistic about the A-share market in the fourth quarter, as there is still room for policy boost which would further lift risk appetite,” Orient Securities said in a report.

** Also, hopes that corporate earnings are expected to bottom out in the third quarter have increased, which could provide fundamental support to stocks, the brokerage added.

** Robust consumer spending during the “Golden Week” also aided sentiment, sending consumer shares higher.

** Spending on retail goods and dining during the week-long National Day holidays returned to growth this year, offering unexpected respite to an economy that has been expanding at its weakest pace in almost three decades.

** However, the uncertainty around developments in Sino-U.S. trade talks kept overall gains in check.

** Prospects for progress in U.S.-China trade talks dimmed on Monday after Washington blacklisted Chinese companies over Beijing’s treatment of predominantly Muslim ethnic minorities, and President Donald Trump said a quick trade deal was unlikely.

** Trump and his top economic adviser, Larry Kudlow, spoke in generally upbeat terms about this week’s discussions with China, the first such high-level talks in more than two months, but Trump insisted he would not be satisfied with a partial deal.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.73%, while Japan’s Nikkei index closed up 0.99%.

** At 07:14 GMT, the yuan was quoted at 7.122 per U.S. dollar, 0.36% firmer than the previous close of 7.148.

** The largest percentage gainers on the main Shanghai Composite index were Henan Yinge Industrial Investment Co Ltd , up 10.2%, followed by Hunan Fangsheng Pharmaceutical Co Ltd, gaining 10.03%, and Nanjing Huamai Technology Co Ltd, up by 10.01%.

** The largest percentage losers on the Shanghai index were Shanghai Film Co Ltd down 10.01%, followed by WPG (Shanghai) Smart Water Public Co Ltd losing 10.01% and Qingdao Richen Food Co Ltd down by 10%.

** As of 07:15 GMT, China’s A-shares were trading at a premium of 29.54% over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom; editing by Uttaresh.V)

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