Chinese shares rise as Beijing implements property sector rescue measures

Mainland China and Hong Kong shares saw an uptick on Monday, primarily due to a rise in gold stocks and positive reactions from investors towards Beijing’s new measures aimed at rescuing the struggling property sector.

Key Points

Beijing’s Measures:

  • Announced “historic” steps to stabilise the property sector.
  • Central bank to provide 1 trillion yuan ($138.33 billion) in extra funding.
  • Eased mortgage rules.
  • Local governments to purchase some apartments.

Market Reactions:

  • Ting Lu, Chief China Economist at Nomura, expressed optimism about Beijing’s approach but advised patience for more stringent measures.
  • Shanghai Composite Index rose by 0.38% to 3,166.08 points at midday.
  • China’s blue-chip CSI300 index increased by 0.21%.

Sector Performance:

  • Financial sector: up 0.31%.
  • Consumer staples: up 0.39%.
  • Real estate: up 1.18%.
  • Healthcare: down 0.66%.

Hong Kong and Shenzhen Markets:

  • Chinese H-shares in Hong Kong: up 0.42% to 6,963.5.
  • Hang Seng Index: up 0.49% to 19,650.18.
  • Shenzhen index: up 0.17%.
  • ChiNext Composite index: up 0.21%.
  • STAR50 index: down 0.21%.

Gold Stocks Performance:

  • Zijing Mining Group, Shandong Gold Mining, and Zhongjin Gold Corp rose by over 2%.
  • CSI non-ferrous metal sub-index gained 2.82%.

Regional Markets:

  • MSCI’s Asia ex-Japan stock index rose by 0.32%.
  • Japan’s Nikkei index increased by 1.03%.

These movements indicate a cautious optimism in the market, buoyed by strategic interventions in the property sector and a strong performance in the gold sector.

Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.

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