China stocks snap three sessions of losses, Hong Kong gains

SHANGHAI: China stocks rose on Thursday after three straight sessions of losses as downbeat factory output data eased fears of policy tightening in the world's second-largest economy.

** The CSI300 index rose 0.3%, to 5,096.38 points at the end of the morning session, while the Shanghai Composite Index gained 0.2%, to 3,524.31 points.

** The gains came after a three-day losing streak, with the CSI300 falling the most in two months on Wednesday.

** Growth in China's factory output slowed for a third straight month in May, likely weighed down by disruptions caused by COVID-19 outbreaks in the country's southern export powerhouse of Guangdong.

** The US Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases, opened talks on how to end crisis-era bond-buying.

** Concerns over domestic valuations remained a focal point for investors.

** "The root cause for the recent correction was high valuations, as many Chinese institutional investors switched out of expensive stocks to prepare for a year-end ranking," said Dong Baozhen, chairman of Beijing-based private securities fund Lingtong Shengtai Investment Management.

** "There is co-existence of extremely high valuations and extremely low valuations in the A-share market, which needs to be corrected," he said.

** New energy vehicle companies, leading healthcare firms and liquor stocks, long seen as bets with frothy valuations, witnessed sharp corrections in the past few days.

** The CSI new energy vehicles index jumped 2.6% on Thursday after tumbling 6.4% on Wednesday, while the CSI300 healthcare index firmed 1% after losing ground for three consecutive sessions.

** In Hong Kong, the Hang Seng index added 0.3% to 28,516.97 points, while the Hong Kong China Enterprises Index gained 0.2% to 10,585.37.