China stocks end February higher ahead of key meeting

SHANGHAI: China stocks rose on the last trading day of the month after the securities regulator said it would tighten scrutiny of derivatives in the stock market, while investor expectations for further stimulus ahead of a key policy meeting also helped lift sentiment.

China’s blue-chip CSI 300 Index expanded gains in the afternoon session, rising 1.9%, while the Shanghai Composite Index also climbed 1.9%.

Hong Kong’s benchmark Hang Seng Index edged down 0.15%, and the Hang Seng China Enterprises Index slipped 0.2%.

For the month, the CSI 300 jumped 9.4% and snapped a six-month losing streak, while the Hang Seng Index gained 6.6%. Other Asian equities climbed, 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 start cutting interest rates.

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.

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.

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 for a hedge fund for excessive, high-frequency trading in share index futures.

On the day, shares of semiconductor and communications equipment makers jumped 6.4% and 5.4%, respectively, to lead gains, while automobiles added 4.6%.

In Hong Kong, tech stocks were up a mild 0.14%.

Meanwhile, Chinese Premier Li Qiang during a meeting with a visiting US delegation said that China and the United States should strengthen economic and trade ties and Washington should avoid decoupling from the Asian country.