China stocks closed up on Friday as the weaker dollar helped ease concerns on capital outflows from the country. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.5 percent, to 3,171.96, while the Shanghai Composite Index gained 1.7 percent, to 2,955.15 points. During midday, The dollar is down over one percent against a basket of currencies over the past two days following Federal Reserve officials' statement on Wednesday indicating that they expect a slower pace of interest rate increases in 2016 than previously expected.
"This is a very important factor," said Xiao Shijun, analyst at Guodu Securities in Beijing. "The falling dollar has removed a major worry for the market." Gains in mainland stocks were broad based, with most sub-indexes including CSI300 financials and Shanghai Composite property sub-index up around two percent.
China's growth board ChiNext outperformed for the second day in a row, gaining 4.4 percent. Mounting capital outflows from China at the end of 2015, encouraged in part by expectations of a strong dollar and higher United States benchmark interest rates, had been a major concern for global financial markets this year. The CSI300 index rose 2.0 percent, to 3,185.04 points at the end of the morning session, while the Shanghai Composite Index gained 1.9 percent, to 2,959.45 points.
China CSI300 stock index futures for March rose 1.6 percent, to 3,178, 7.04 points below the current value of the underlying index. The Hang Seng index added 0.7 percent, to 20,643.25 points. The Hong Kong China Enterprises Index gained 1.4 percent, to 8,893.69. The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 135.23.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa. The northbound quota for the Hong Kong-Shanghai Stock Connect, currently set at 13 billion yuan, saw net inflows of 0.80 billion yuan. Total volume of A shares traded in Shanghai was 15.15 billion shares, while Shenzhen volume was 18.16 billion shares. Total trading volume of companies included in the HSI index was 0.7 billion shares.