October 15, 2015 / 4:35 AM / 5 years ago

China, Hong Kong stocks advance on stimulus hopes

* CSI300 +1.4 pct; SSEC +1.4 pct; HSI +2.2 pct

* gov stimulus hopes rise ahead of Beijing’s key economic meeting

* NDRC says inflation will remain mild in coming months

SHANGHAI, Oct 15 (Reuters) - China and Hong Kong stocks rose sharply on Thursday morning amid signs that some investors are returning to the market ahead of a key Communist Party meeting later this month, betting Beijing will unveil fresh stimulus to reinvigorate the economy.

Both the CSI300 index and the Shanghai Composite Index advanced 1.4 percent by lunchtime, to 3,454.74 points and 3,308.24 points, respectively.

Hong Kong’s Hang Seng Index jumped over 2 percent to the highest level in nearly two months.

Following the release of weak inflation data for September, China’s economic planner said on Thursday that consumer prices will continue to rise at a mild pace in coming months.

That, coupled with expectations that China’s economic growth will fall below 7 percent for the first time since the global financial crisis in the third quarter, is fanning hopes of more government measures to aid growth.

“There seem to be considerable expectations of further economic stimulus, which could mitigate some of deflationary pressures,” said Gerry Alfonso, analyst at Shenwan Hongyuan Securities.

China has already stepped-up efforts to support the economy in recent months, ranging from fast-tracking infrastructure investment to cutting downpayments for first-time home buyers.

And during October 26-29, Beijing will hold a key meeting that would help draft the next five-year plan for China’s economic and social development.

Reflecting rising risk appetite, outstanding margin loans in China posted consecutive gains over the past five sessions, while last week, investors’ securities accounts on the mainland witnessed a net inflow of 68.4 billion yuan, snapping five straight weeks of outflows.

Stocks in China rose across the board, with IT and telecom stocks leading the charge.

Anyuan Coal Industry shares surged by their maximum 10 percent daily limit, after the coal miner disclosed in its quarterly report that China’s state investment firm and margin lender had become its major shareholders.

In Hong Kong, Hang Seng added 2.2 percent, to 22,925.64 points, while the Hong Kong China Enterprises Index gained 2.8 percent, to 10,619.63.

Shares of China Unicom (Hong Kong) Ltd, China Telecom Corp Ltd and China Mobile Ltd gained after China’s three main telecom operators agreed to consolidate towers and related assets into a jointly owned firm, a move that would reduce duplication of infrastructure in China.

Samuel Shen and Pete Sweeney; Editing by Simon Cameron-Moore

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