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China stocks extend gains as new leadership line-up unveiled; HK rebounds
October 25, 2017 / 4:49 AM / 25 days ago

China stocks extend gains as new leadership line-up unveiled; HK rebounds

* SSEC +0.1 pct, CSI300 +0.3 pct, HSI +0.7 pct

* China unveiled Politburo Standing Committee during lunch break

* Environmental protection shares rise on hopes of policy support

SHANGHAI, Oct 25 (Reuters) - China stocks were on track to rise for a fourth straight session on Wednesday, as the ruling Communist Party revealed its new leadership line-up.

Hong Kong stocks rebounded, after Wall Street hit fresh highs overnight as earnings statements from several major U.S. companies lifted investors outlook for the global economy.

China’s blue-chip CSI300 index rose 0.3 percent, to 3,969.10 points at the end of the morning session, while the Shanghai Composite Index gained 0.1 percent, to 3,392.29 points.

During the lunch break, the Communist Party unveiled its core decision-making body, the Politburo Standing Committee, headed by President Xi Jinping.

Deciphering policies from the week-long Party Congress, HSBC’s Greater China Economist Julia Wang expected co-ordinated policies to reduce financial risks, more institutionalised environment policies, and accelerated state-owned enterprise (SOE) reforms.

An index tracking environmental protection shares rose 0.6 percent, as investors bet they will benefit from Xi’s vision of a “beautiful China.”

Indexes tracking SOEs were also firm.

But reflecting continuous tightness in liquidity conditions, China’s 10-year treasury yields hovered around the highest level since late 2014.

Trading has been calm during the Party Congress, as regulators vowed to maintain market stability. But as the curtain closed for the congress, some worried that the market would come under pressure.

Hu Yuanzhi, fund manager at Shanghai-based asset manager Rationalstone Investment, said the market could face the risk of a correction in the fourth quarter.

“Trading has been thin lately, and volatility has been low. There is risk of a correction, now that the congress has ended,” Hu said.

HONG KONG

Hong Kong stocks rose, drawing inspiration from sustained strength that drove Wall Street record highs.

The Hang Seng index added 0.7 percent, to 28,360.59 points, while the Hong Kong China Enterprises Index gained 1.1 percent, to 11,529.84.

Reporting by Samuel Shen and John Ruwitch; Editing by Simon Cameron-Moore

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