SHANGHAI: Mainland China stocks rose on Thursday, buoyed by hopes for more stimulus after a string of disappointing data, while Hong Kong followed regional peers higher as US inflation data reinforced bets the Federal Reserve will start cutting rates in September.
China stocks track Asian markets higher
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Official data showed China’s factory output growth slowed and missed expectations in July, adding to indicators that the world’s second-largest economy is struggling to kick into a higher gear, even with recent government support.
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“While it is worth monitoring how the rate cuts from July will begin to affect key macro indicators starting from next month’s data, we believe that there remains a solid case for further easing later this year,” said Lynn Song, chief economist for Greater China at ING.
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“Weak credit, low inflation, and soft growth should provide plentiful reasons for easing, and if the yuan depreciation pressures wane after US rate cuts kick off, there should be little holding the People’s Bank of China (PBOC) back from further cuts.”
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At the midday break, the Shanghai Composite index was up 1.04% at 2,880.23.
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China’s blue-chip CSI300 index was up 1.15%, with its financial sector sub-index higher by 1.47%, the consumer staples sector up 0.87%, the real estate index up 1.63% and the healthcare sub-index up 0.95%.
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Chinese H-shares listed in Hong Kong rose 0.61% to 6,061.94, while the Hang Seng Index was up 0.34% at 17,171.01.
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The smaller Shenzhen index was up 1.1%, the start-up board ChiNext Composite index was higher by 0.99% and Shanghai’s tech-focused STAR50 index was up 1.44%.
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Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.08%, while Japan’s Nikkei index was up 0.96%.
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The yuan was quoted at 7.1578 per US dollar, 0.25% weaker than the previous close of 7.14.
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