SHANGHAI: Chinese stocks closed higher after choppy trade on Thursday, as initial euphoria over additional stimulus measures to support an ailing economy was countered by investor concerns over Beijing’s zero-COVID policy and a potential rebound in cases.
The blue-chip CSI300 index rose 0.2% to 4,089.57, while the Shanghai Composite Index gained 0.4% to 3,195.46 points.
The Hang Seng index fell 1.0% to 21,082.13, while the China Enterprises Index lost 1.1%, to 7,267.57 points.
China’s cabinet said on Wednesday it would increase the credit quota for policy banks by 800 billion yuan ($120 billion) for them to support infrastructure construction.
“With frequent measures introduced to support the economy, A-shares recorded their biggest rebound in May since the correction,” said Chen Mengjie, chief strategist at Yuekai Securities, after the Shanghai Composite Index jumped 4.6% in May, the biggest monthly rise in a year.
“The market might see range-bound performance in June, but we are not pessmistic, the darkest hour has passed.” China’s cabinet announced a package of 33 measures covering fiscal, financial, investment and industrial policies on Tuesday to revive its pandemic-ravaged economy.
Shanghai sprung back to life after the financial hub lifted most anti-COVID curbs, but worries over a rebound of cases and the zero-COVID policy lingered.
“Due to still-elevated COVID-related uncertainty, we see big downside risks to our current annual GDP growth forecast of 3.9% for 2022,” said Nomura in a note.
China will aim to ensure its grids source about one third of power from renewable sources by 2025, up from 28.8% in 2020, the state planning agency said on Wednesday in a new “five-year plan” for the renewable sector.
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