Stocks rise on Xiongan trade despite regulatory clampdown

Chinese mainland stocks edged higher on Thursday as investors continued to bet on shares that could benefit from the country’s plan to build the Xiongan economic zone in North China’s Hebei Province, although sentiment on the mainland remains tempered by worries about a cooling economy.

Investor have been primarily concerned about monetary tightening, even as China’s March trade data exceeded expectations. Also overhanging the market are regulators’ efforts to clamp down on speculation with 14 companies halting share trading.

China’s blue- chip CSI 300 Index rose 0.15 percent, to 3,514.57 points.

The benchmark Shanghai Com- posite Index gained 0.07 percent to 3,275.96 points, while the Shenzhen Component Index climbed 0.63 percent to 10,654.08 points.

Hong Kong stocks were roughly flat as rising geopolitical risks continued to curb risk appetite.

Brokerage Shenwan Hongyuan said in its latest strategy report that thematic investments in concepts such as Xiongan are unlikely to change the current “range- trading” pattern of the market.

“Under the current macro environment, the government is stepping on the brakes using a combination of policy tools, such as real estate curbs and higher repo rates,” analyst Yao Liqi wrote.

“In such a backdrop, the market is lowering growth expectations and anticipating higher interest rates, thus, putting pressure on stock valuations,” Yao noted.

Fourteen Chinese companies suspended trading of their shares on Thursday, citing the need to further evaluate the potential impact on businesses from Xiongan. Some market participants suspect the concerted moves are the result of regulators’ intervention.