SHANGHAI: China stocks rose on Thursday, after the securities regulator said it would tighten scrutiny of derivative businesses in the stock market, while investor expectations for further stimulus ahead of a key policy meeting also helped sentiment.
China, HK stocks fall on profit booking
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China’s blue-chip CSI 300 Index gained 0.9% by the lunch break, recovering after a 1.3% slide in the previous session, while the Shanghai Composite Index rose 0.7%.
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For the month, the CSI 300 was up 8.3% so far, on track to snap a six-month losing streak.
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Hong Kong’s benchmark Hang Seng Index edged up 0.2%, and the Hang Seng China Enterprises Index was almost flat.
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Other Asian equities were mostly weaker, while the dollar and US Treasuries were largely steady ahead of crucial US inflation data that could provide fresh clues on when the Federal Reserve will cut interest rates.
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This month, state-led buying and tighter regulations have been primarily responsible for pulling China’s blue-chip index off five-year lows, but more aggressive stimulus is needed for the momentum to continue amid a moribund economy.
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Next week’s annual session of the National People’s Congress, where the annual growth target will be set and a plan will be laid out for achieving it, will provide the clearest indications of the government’s stimulus efforts.
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In the latest move to revive investor confidence, the China Securities Regulatory Commission said it would strengthen supervision of derivatives including so-called DMA-Swap products, and announced punishment of a hedge fund for excessive, high-frequency trading in share index futures.
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China and the United States should strengthen economic and trade ties and Washington should avoid decoupling from China, Chinese Premier Li Qiang said during a meeting with a visiting US delegation.
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Shares in semiconductor and communications equipment makers jumped more than 3% each to lead the gains, while automobiles added 2.6%.
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In Hong Kong, tech giants traded flat, while healthcare firms rose 1.2%.
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