SHANGHAI: China stocks rose on Monday as a strong rebound in January credit demand lifted the market’s sentiment, while Hong Kong shares dropped on geopolitical tensions between Beijing and Washington.
** China’s blue-chip CSI300 Index added 0.6% by the end of the morning session, while the Shanghai Composite Index was up 0.5%.
** Hong Kong’s benchmark Hang Seng Index lost 0.5%, and the Hang Seng China Enterprises Index slipped 0.1%.
** Other Asian shares slid and the dollar rose as investors hunkered down for US inflation data that could jolt the outlook for interest rates globally.
** New bank loans in China jumped more than expected to a record 4.9 trillion yuan ($720.21 billion) in January, as the central bank looks to kickstart a recovery in the world’s second-biggest economy after the lifting of harsh pandemic controls.
** “The strong credit data let the market see the hope that social finance gradually bottomed out and the economy will recover,” analysts at China Merchants Securities said, expecting the A-share market will be boosted in the short term.
** Shares in consumer-related companies led the gains, with tourism firms rising 2.5% and liquor makers jumping 4.4%.
** However, Nomura analysts cautioned that household loans still remained subdued amid contractions in the sales of new homes and autos, which could potentially weaken future credit expansion.
** The Joe Biden administration plans to outright ban investments in some Chinese technology companies and increase scrutiny of others, sources told Reuters.
** Meanwhile, an air of geopolitical mystery was added by news the U.S Air Force had shot down a flying object near the Canadian border, the fourth object downed this month.
** Officials declined to say whether it resembled the large white Chinese balloon that was shot down earlier this month.
** Tech giants listed in Hong Kong dropped 0.5%.