China stocks edge up on policy support pledge

SHANGHAI: China stocks edged up on Tuesday, after the country’s cabinet pledged to step up counter-cyclical policy support to address rising economic strains, though trading remained thin ahead of an upcoming holiday.

Hong Kong shares fell.

China’s blue-chip CSI300 Index was roughly flat by the lunch break, while the Shanghai Composite Index gained 0.1%.

Hong Kong benchmark Hang Seng was down 0.6%.

China’s real estate developers led gains onshore, with Vanke shares up nearly 8%, after the State Council meeting vowed to roll out measures to stabilise the property market.

“We expect policymakers to further broaden the use of housing provident funds to slightly reduce weighted-average mortgage rates, and more large cities to introduce local housing easing measures,” analysts at Goldman Sachs said in a note.

Sentiment among AI component makers rebounded slightly, with the 5G Communication Index up 0.8% and the tech-focused STAR50 Index rising 0.6%.

Rising US Treasury yields, coupled with insufficient liquidity ahead of the week-long holiday, weighed on the market sentiment, analysts at Northeast Securities said in a note.

“However, after the sharp declines, with negative sentiment quickly running its course, quality assets have become more attractively valued again,” the analysts said.

China’s week-long National Day holiday will start on Thursday, with onshore trading resuming on October 8.

The Hang Seng Innovative Drug Index rose 3.3%.

Tech majors listed in Hong Kong fell 1.4%.

Shares of fast-fashion platform Shein Global Holdings fell to their lowest level since the firm’s debut on September 1.