China stocks extend gains after policy support
Business
In Hong Kong, tech giants climbed 2.6pc while mainland property developers surge nearly 6pc
SHANGHAI (Reuters) – China shares closed higher on Tuesday, extending gains from the previous session after Beijing introduced a package of measures to boost investor confidence over the weekend, including a stamp duty cut on stock trading.
China's blue-chip CSI 300 Index rose 1 per cent, while the Shanghai Composite Index climbed 1.4pc.
Hong Kong's Hang Seng Index added 2pc and the Hang Seng China Enterprises Index jumped 2.3pc.
Both the CSI 300 and the Hang Seng benchmarks have bounced back from the nine-month lows hit earlier this month, boosted by the support measures.
The measures also include a slower pace of initial public offerings, further regulations on major shareholders' share reductions, and lower margin financing requirements.
Analysts say the markets-focused policies could boost investor confidence for a short term, but it's hard to revive a slowing economy. On Monday, the CSI 300 Index erased most of its strong opening gains by close.
On Tuesday, most sectors rose, with artificial intelligence and semiconductors jumping more than 3.5pc to lead the gains.
Healthcare and consumer discretionary added more than 2pc each.
In Hong Kong, tech giants climbed 2.6pc. Mainland property developers surged nearly 6pc amid reports that Chinese lenders were discussing cutting interest rates on existing mortgages.
“Stamp-duty reductions and new-listing halts have in the past provided only a temporary bump to markets, not a fundamental turnaround," said Wei He, China economist at research firm Gavekal Dragonomics.
"A sustained market rally is unlikely without more substantial stimulus to bolster economic growth and stabilise the property sector."
Bank of America said the next two-three weeks are an important window for policy actions. China's economy and markets are expected to see more downward pressure in the next two quarters, without material easing measures in the near term, it added.
