September 18, 2017 / 5:03 AM / a year ago

China, Hong Kong stocks cheered by strong China loan data, Asian gains

SHANGHAI, Sept 18 (Reuters) - China and Hong Kong stocks rose on Monday as stronger-than-expected Chinese loan data added to views that economic growth is holding up well despite slowly rising borrowing costs and a crackdown on riskier forms of financing.

The gains added to region-wide optimism that pushed Asian shares to decade highs.

China’s blue-chip CSI300 index rose 0.5 percent to 3,848.78 points by the lunch break, while the Shanghai Composite Index gained 0.3 percent to 3,361.95.

In Hong Kong, the Hang Seng index added 1.1 percent, while the Hong Kong China Enterprises Index gained 1.2 percent.

August loan data released after the market close on Friday showed Chinese banks extended more credit than expected in August, buoyed by demand from home buyers and companies.

China home price data on Monday was also well received.

While home price rises continued to moderate in general after a series of government cooling measures — suggesting authorities have been successful in deflating a property bubble — there were no signs of a severe correction which would damage the economy.

Moreoever, underlying housing demand still appears solid, even if the pace of sales has slowed somewhat.

Confidence was further supported by a central bank survey showing one-third of Chinese households still believe home prices will keep rising in the coming quarter, despite state moves to cool them.

Hong Kong-listed shares of Chinese property developers jumped, including Country Garden, China Vanke and China Evergrande, pushing an index tracking the sector up 5.2 percent.

“People are finding that the property sector is not as bad as people expected, which is why major property firms have become investors’ darlings,” asset manager Windsor Capital said in its latest strategy report.

Windsor expects the market to trend higher, despite potential corrections.

In China, Chinese liquor makers rallied strongly, led by Shanxi Xinghuacun Fen Wine, Sichuan Swellfun and Wuliangye Yibin.

Investors expect the week-long Mid-Autumn Festival and National Day holiday starting Oct 1 would help boost demand for liquor.

Reporting by Samuel Shen and John Ruwitch; Editing by Kim Coghill

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