SHANGHAI: China stocks rose on Friday and logged their biggest weekly gain in nine months, as resilient risk appetite helped investors look past a raft of disappointing economic data. Meanwhile, Hong Kong shares declined.
China’s blue-chip CSI300 Index closed up 0.7% while the Shanghai Composite Index gained 0.8%. Hong Kong’s benchmark Hang Seng fell 1%.
The CSI300 Index has risen 2.4% this week and are set to log the best weekly performance since the week of November 4, 2024, while the Hang Seng Index added 1.7% for the week.
China’s factory output growth slumped to an eight-month low in July, while retail sales slowed sharply, reinforcing the challenge confronting policymakers as they strive to shore up an economy in the face of soft demand at home and external risks.
“The weak data should revive stimulus hopes, particularly on consumption and property, as policymakers are keen to achieve the around 5% GDP target,” UBS analysts said.
Appetite for risk assets strengthened this week, with the Shanghai Composite Index hitting its highest since December 2021. Meanwhile, the margin financing balance for stocks surpassed 2 trillion yuan ($278.50 billion), the highest since 2015.
Meanwhile, onshore investors bought a net of HK$36 billion of Hong Kong shares via the Stock Connect scheme on Friday, highest on record since data is available.
China’s new home prices declined again in July, falling 0.3% on-month. However, the drop narrowed slightly in major cities as more local governments rolled out incentives for homebuying.
China is preparing to mobilise central government-owned companies in Beijing to buy unsold homes from troubled property developers, media reported on Thursday. Real estate shares rose 1.9%.
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