SHANGHAI: Mainland China and Hong Kong stocks tracked global peers higher on Wednesday, while an official pledge to support economic recovery from the COVID-19 fallout also improved market sentiment.
** At the midday break, the Shanghai Composite index gained 0.67% to 3,301.25 points, while the blue-chip CSI300 index was up 0.38% at 4,285.65 points.
** The financial sector sub-index edged up 0.28%, the consumer staples sector climbed 0.41%, and the healthcare sub-index jumped 1.03%.
** The smaller Shenzhen index rose 0.58%, the start-up board ChiNext Composite index advanced 0.69% and Shanghai’s tech-focused STAR50 index climbed 1.62%.
** In Hong Kong, the benchmark Hang Seng Index touched an over one-week high and gained 1.74% to 21,020.61 points by noon, when Chinese H-shared listed in Hong Kong rose 1.82%.
** Mainland and Hong Kong markets tracked a global rally as strong US corporate earnings and the expected resumption of Russian gas supply to Europe helped lift sentiment.
** China’s Premier Li Keqiang said on Tuesday recovery in the Chinese economy from a recent bout of weakness is not yet firmly established and “painstaking” efforts are needed to stabilise overall economic performance, according to state media.
** Earlier in the session, China kept its benchmark lending rates for corporate and household loans unchanged, as policymakers adopted a cautious approach amid signs of economic recovery, growing domestic inflationary pressure and aggressive global rate rises.
** “With China beginning its slow climb out of recession, we have rotated equity exposure from slowing developed market economies to at least a stabilising China domestic economy looking ahead,” said Norman Villamin, CIO Wealth Management at Union Bancaire Privee (UBP).
** “After having exited China’s markets last year, we started to make a comeback as economic activity seems to have bottomed while further stimulus is likely. In addition, Chinese equities provide diversification benefit in the context of a global portfolio due to their low correlation with other markets.”
** One of the major underperformers was the property sector as it continued to face pressure from a scare caused by the proliferation of threats by homebuyers to withhold payments for stalled projects.
** The real estate index fell 0.23% at noon, while mainland developers listed in Hong Kong eased 0.49%.