SHANGHAI, Oct 27 (Reuters) - China’s blue-chip index is poised to hit a fresh two-year high on Friday, capping a week in which President Xi Jinping consolidated power at a key Party Congress, pledging to build a modern social country for a “new era”.
The three-week rising streak in blue chips has also been fuelled by signs of economic resilience in the world’s second-biggest economy.
A slew of industry leaders including China Life Insurance , Aluminium Corp of China and Kweichow Moutai have posted quarterly results that trumped market expectations.
Furthermore, data on Friday showed profits for China’s industrial powerhouses surged the most in nearly six years in September.
The blue-chip CSI300 index rose 0.4 percent, to 4,009.16 points at the lunch break, bringing its gains to 2.1 percent so far this week.
The Shanghai Composite Index edged up 0.3 percent, to 3,417.12 points, up 1.1 percent so far this week.
“It’s very rare for the stock market to rise before, and throughout major political conferences in China. It’s indeed a new era,” said Wu Kan, head of equities trading at Shanshan Finance.
However, he said the bullish headline index performance has masked the seismic shift in China’s equity landscape, with money being increasingly piled into a small number of industry leaders that benefit from government policies or promise stable returns.
Investors are unwinding bets in smaller, weaker players with risk appetite increasingly curbed by a tighter monetary environment.
Relecting the changing trend, shares of China’s top fiery liquor maker Moutai jumped 4 percent on Friday morning to a record high of 629 yuan ($94.61), adding to Thursday’s 7 percent surge. The stock is up a staggering 88 percent this year.
Insurance shares were also firm on Friday, bolstered by strong earnings from industry leader China Life, which saw a 365.5 percent jump in third-quarter net profit.
The banking sector was also firm, up 1.9 percent, as lenders such as Jiangsu Chanshu Rural Commercial Bank posted stellar earnings.
In Hong Kong, stocks rose sharply on Friday, inspired by overnight strength on Wall Street after an encouraging slew of earnings from U.S. tech giants, and after the European Central Bank extended its stimulus.
The Hang Seng index added 0.8 percent, to 28,438.43 points, while the Hong Kong China Enterprises Index gained 1.5 percent, to 11,622.97.
But for the week, the Hang Seng is poised to lose about 0.2 percent, while the HSCE is poised to rise about 0.6 percent.
Reporting by Samuel Shen and John Ruwitch; Editing by Jacqueline Wong