China stocks rise on hopes of policy support; Hong Kong dips

SHANGHAI: China stocks started the week on a firm note due to hopes of more policy support to shore up the world's second-largest economy hurt by the coronavirus crisis.

The CSI300 index rose 0.6% to 4,918.20 at the end of the morning session, while the Shanghai Composite Index gained 0.4%, to 3,360.48.

China will step up fiscal policy support for a strategy to make its economy mainly rely on domestic demand, supply chains and innovation, Finance Minister Liu Kun said.

China's President Xi Jinping on Saturday targeted a steeper cut in rates of carbon emissions relative to economic activity by 2030 and set new goals for growth in renewable energy and forest stock.

China has unveiled a "dual circulation" strategy for the next phase of economic development in which it will rely mainly on "domestic circulation" - the internal cycle of production, distribution, and consumption, supported by innovation and upgrades in the economy.

A continued economic recovery and policy support would help boost market confidence, analysts at Dongguang Securities said in a note.

China's vehicle sales are likely to hit 25.3 million units this year, an industry body said on Friday, as the world's biggest vehicle market continued to lead the global auto industry recovery.

Nasdaq said last week it will remove shares of four Chinese construction and manufacturing companies from indexes it maintains in response to a US order restricting purchase of their shares.

The stocks to be removed barely moved by midday break, as investors shrugged off such news following S&P's removal decision just days ago.

The Hang Seng index dropped 0.1% to 26,480.36, while the Hong Kong China Enterprises Index gained 0.2%, to 10,468.38.