SHANGHAI: Mainland China stocks ended higher on Thursday, buoyed by hopes for more stimulus after a string of disappointing data, while Hong Kong closed largely flat despite US inflation data reinforcing bets the Federal Reserve will start cutting rates in September.
Official data showed China’s factory output growth slowed and missed expectations in July, adding to indicators that the world’s second-largest economy is struggling to kick into a higher gear, even with recent government support.
“While it is worth monitoring how the rate cuts from July will begin to affect key macro indicators starting from next month’s data, we believe that there remains a solid case for further easing later this year,” said Lynn Song, chief economist for Greater China at ING.
“Weak credit, low inflation, and soft growth should provide plentiful reasons for easing, and if the yuan depreciation pressures wane after US rate cuts kick off, there should be little holding the People’s Bank of China (PBOC) back from further cuts.”
At the close, the Shanghai Composite index was up 0.94% at 2,877.36 points.
The blue-chip CSI300 index was up 0.99%, with its financial sector sub-index higher by 1.36%, the consumer staples sector up 0.67%, the real estate index up 1.29% and the healthcare sub-index up 0.66%.
The smaller Shenzhen index ended up 0.82% and the start-up board ChiNext Composite index was higher by 0.53%.
At the close of trade, the Hang Seng index was down 4.22 points or 0.02% at 17,109.14. The Hang Seng China Enterprises index rose 0.17% to 6,035.27.
The sub-index of the Hang Seng tracking energy shares rose 0.4%, while the IT sector dipped 0.85%, the financial sector ended 0.48% higher and the property sector dipped 0.08%.
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