SHANGHAI: China stocks closed up on Monday on hopes of more policy easing after the country’s central bank said it would implement prudent monetary policy in a “precise and forceful manner” to support economic growth and employment.
China’s blue-chip CSI300 Index and the Shanghai Composite Index both added 1.3% at the close, and the Shanghai index logged biggest daily rise in nearly two months.
Hong Kong’s benchmark Hang Seng Index climbed 2.1%, and the Hang Seng China Enterprises Index advanced 2.6%.
The People’s Bank of China (PBOC) will make better use of aggregate and structural policy tools to stabilise growth, employment, effectively support domestic demand, it said on Friday.
“(The) PBOC pledged to intensify countercyclical adjustment to support domestic demand, boost consumption and build a virtuous circle of economic growth,” said Goldman Sachs in a note. “We continue to expect a 25bp RRR cut and a 10bp additional policy interest rate cut in the rest of the year to facilitate economic growth.”
China’s ruling Communist Party appointed central bank Deputy Governor Pan Gongsheng as the bank’s party secretary on Saturday.
“The market is expecting some stimulus policies and Pan’s new appointment is seen clearing way to policy announcements,” said Hao Hong, chief economist at GROW Investment Group.
China’s factory activity slowed in June as the Caixin manufacturing survey showed a dip to 50.5, from 50.9 in May.
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