HONG KONG: China and Hong Kong shares edged up on Thursday to join a broader rally in Asia, with sentiment buoyed by state media reports of potential easing measures from Beijing in coming weeks.
The Shanghai Composite Index closed up 0.3% at 3,236.03 points.
The blue-chip CSI300 index added 0.1%, with its financial sector sub-index higher by 0.5% and energy sector adding 1.3%.
In Hong Kong, the benchmark Hang Seng Index gained 1.2% at 19,522.89.
Sentiment was largely upbeat across Asia as traders raised bets on potential rate cuts by the Federal Reserve this year following an easing in core US inflation.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.3%, while Japan’s Nikkei Index closed up 0.3%.
Investors are now anticipating more easing measures from Beijing after state media reported that China’s central bank may cut banks’ reserve requirement ratio (RRR) before the Spring Festival at the end of this month.
As room for interest rate cuts is curtailed by the yuan depreciation pressure, an RRR cut could send a clearer signal to ease the policy void until March, and is a straightforward instrument to offer permanent liquidity, analysts at Bank of America said in a note to clients.
The markets are also awaiting a set of key economic data due on Friday, including fourth-quarter and full-year 2024 GDP data; December’s industrial output and investment and consumption figures, to gauge China’s economic recovery and the effectiveness of Beijing’s support package.
Limiting gains on Thursday, chip stocks declined 0.6%, with AI firm Cambricon Technologies tumbling nearly 15% after the US escalated its tech curbs and added more Chinese entities to a restricted trade list.
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