SHANGHAI: China stocks rose on Monday as the capital Beijing and financial hub of Shanghai eased stringent COVID-19 control measures, with consumer and travel stocks leading the gains on expectation of returning to normal life.
The blue-chip CSI300 index ended 0.7% higher at 4,029.02, while the Shanghai Composite Index gained 0.6% to 3,149.06 points.
China stocks rise on hopes around stimulus, better ties with US
** Some residents in Beijing were allowed to return to work, while Shanghai inched closer towards lifting its two-month old COVID-19 lockdown from Wednesday, as the number of infections across China dropped.
** On Sunday, Shanghai authorities said they will remove “unreasonable” conditions for businesses to resume work from Wednesday and announced 50 policy measures to support the economy.
** “With the continuous implementation of work resumption plans, worries over growth are expected to be eased marginally,” said CICC in a note.
** Also, “given the recent increase in macro policy support and the relatively loose macro liquidity conditions, we believe market valuation has bottomed for the year,” said Meng Lei, China Equity Strategist at UBS Securities.
** “There could be more earnings downgrades in the period ahead and around the Q2 earnings season… opportunity will emerge once the current round of earnings downgrades are largely done.” Meng added.
** Consumer staples and tourism led the gains, up 1.9% and 3%, respectively. Semiconductors and automobiles rose more than 1% each, while real estate developers lost 2%.
** China’s securities regulator said it has agreed to include exchange-traded funds (ETFs) in stock connect schemes with Hong Kong.
** Asian stocks also rose, as investors wagered on an eventual slowdown in US monetary tightening.
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