SHANGHAI: China stocks jumped on Friday and logged their best week since November after the country’s top leaders pledged in the Politburo meeting held earlier this week to roll out further policy support to aid economic recovery.
Real estate and financials shares led gains on the day after China’s housing minister urged efforts to strengthen sector recovery.
China’s blue-chip CSI 300 Index surged 2.3% and the Shanghai Composite Index added 1.8% at close. The Hang Seng Index gained 1.4% and the Hang Seng China Enterprises Index climbed 2.1%. For the week, the CSI 300 Index rose 4.5%, while the Hang Seng Index was up 4.4%.
“The relatively dovish tone of the Politburo meeting has improved sentiment, but quick follow-through with stimulus will be key to sustaining the momentum,” Morgan Stanley analysts said in a note.
China needs more effective implementation measures such as lower home mortgage rates and down-payment ratios for first-time home buyers to help spur home purchases, said Ni Hong, minister of housing and urban-rural development.
“This confirms an easing direction,” said J.P.Morgan analysts. “Overall, this move is reasonable, and we expect easing could intensify if sales remain weak.”
The CSI 300 Real Estate Index and the CSI Financials Index climbed 4.4% and 4.7%, respectively. Securities firms jumped 7.6% to outperform other sectors. Bloomberg News reported that China’s markets regulator consulted securities firms for possible measures to boost stocks.
Foreign investors bought a net 16.4 billion yuan ($2.29 billion) of Chinese stocks on Friday, sending the weekly net buying to 34.5 billion yuan, the biggest weekly inflow since January.
Tech giants listed in Hong Kong advanced 2.9% and gained 8.8% for the week, amid policy signs supporting the private sector. Shares in most other sectors also rose, with consumer staples and automobiles up 1.8% and 4.2%, respectively.
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