SHANGHAI – China stocks closed up to its highest level since early March on Friday, gaining for a fourth straight week, as the country stepped up effort to stimulate a COVID-hit economy with the infusion of fresh capital into the banking system to keep liquidity stable .
The blue-chip CSI300 index rose 1.2% to 4,394.77, while the Shanghai Composite Index gained 0.9% to 3,349.75 points.
The Hang Seng index rose 2.1% to 21,719.06, while the China Enterprises Index gained 2.2% to 7,629.06 points.
** For the week, the CSI300 Index rose nearly 2%, while the Hang Seng Index added 3.1%.
** The People’s Bank of China (PBOC) injected 60 billion yuan ($ 8.96 billion) worth of seven-day reverse repos, as demand for cash by the end of the first half of the year started to pick up.
** Global equity markets rose, as commodities including copper and oil dropped, offering a salve for inflation fears.
** Refinitiv data showed strong inflows from foreign investors, totalling more than 13.1 billion yuan ($ 1.96 billion) through Stock Connect’s Northbound leg.,
** Chinese battery giant CATL jumped nearly 5% as it will start mass production next year of its latest generation product, with greater efficiency that lets electric cars drive longer distances on each charge.
** New energy firms added 2.2%, while shares in defense and tourism went up more than 3% each.
** Healthcare firms listed in mainland China gained 2.9%, while peers trading in Hong Kong surged nearly 7%.
** “After a swift rebound led by the reopening theme and high-beta stocks / laggards recently, we expect the market to consolidate in the next two months on a mild economic recovery and earnings downgrades,” said Meng Lei, China equities strategist at UBS Securities, as the CSI300 has risen roughly 15% since a trough in late April.
** He added market pullback in the next two months would likely provide an attractive opportunity and a more material valuation re-rating from late third quarter, when broad estimate cuts potentially come to an end.
** Tech giants listed in Hong Kong were up 4.1%, with e-commerce giant Alibaba rising 5.5% amid hints that China’s technology crackdown is abating. (Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)
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