December 13, 2018 / 4:33 AM / a year ago

China stocks jump on further policy support hopes

* .SSEC +1.6 pct, .CSI300 +1.9 pct; .HSI +1.3 pct

* Analysts expect Chinese leadership’s support for ailing economy

* More dovish Fed set to allow further room for easing in China

Dec 13 (Reuters) - Stocks in China and Hong Kong rallied on Thursday as investors expect the Chinese leadership to prop up economic growth with new measures this month and ease policy further in 2019. ** By midday, the Shanghai Composite index was up 1.6 percent at 2,643.79, while the blue-chip CSI300 index jumped 1.9 percent. ** Share prices rose across the board. The CSI300 financial sector sub-index was higher by 1.6 percent, the consumer staples sector was up 2.4 percent, the real estate index was up 2.9 percent and the healthcare sub-index climbed 1.4 percent. ** The smaller Shenzhen index was up 1.5 percent and the start-up board ChiNext Composite index was higher by 1.4 percent. ** In Hong Kong, Chinese H-shares rose 1.5 percent, while the main Hang Seng Index was up 1.3 percent at 26,537.78. ** China’s leaders are set to hold the Central Economic Work Conference, which typically takes place in December. As economic growth softens, analysts forecast strong policy support to prop up growth, especially in infrastructure and growth. ** “It may happen over the weekend, as we are drawing closer to Dec. 18,” the anniversary of a Chinese leadership meeting 40 years ago, which set the course for reform and opening up, said Cao Xuefeng, head of research at Huaxi Securities in Chengdu. ** “People have been focusing on the conference” in recent sessions, said Zhang Gang, a Shanghai-based analyst at Central Securities. The bullish sentiment grew as more and more analysts started laying out their expectations of what will happen at this all-important economic conference. ** Expectations are also high for further monetary easing, analysts at Guotai Junan Securities said in a memo on Thursday. “As the U.S. Federal Reserve slows down in raising rates, and as inflation moderates in China, there will be more room for policies like further cut to reserve requirement ratio (RRR).” ** The Fed will announce its December rate decision on Dec. 19. Even if the Fed delivers a hike next week, but releases signals for fewer hikes next year after the New Year, China could still cut RRR two to three more times in 2019, Zhang added. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.9 percent while Japan’s Nikkei index was up 1 percent. ** At 04:07 GMT, The yuan was quoted at 6.8730 per U.S. dollar, almost 0.1 percent firmer than the previous close of 6.8793. ** The largest percentage gainers in the main Shanghai Composite index were Sichuan Languang Development Co Ltd, up 10.1 percent, followed by Center International Group Co Ltd , gaining 9.9 percent and Shanghai Zhixin Electric Co Ltd, up by 8.4 percent. ** The top gainers among H-shares were China Resources Land Ltd , up 5.7 percent, followed by China Vanke Co Ltd , up 5.6 percent, and Anhui Conch Cement Co Ltd , which gained 5.5 percent.

Reporting by Hong Kong and Shanghai newsrooms; Editing by Sunil Nair

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