China blue-chip stocks jump most in 5 months

CHINA blue-chip stocks staged their biggest jump in five months yesterday on strong foreign inflows, with overseas investors snapping up big-cap Chinese companies as policy expectations and the market’s low valuation offered attractive opportunities.

The blue-chip CSI 300 Index closed up 2.3 percent, logging the biggest gain since July 25, and the Shanghai Composite Index added 1.4 percent.

Hong Kong’s Hang Seng Index surged 2.5 percent, and the Hang Seng China Enterprises Index climbed 2.9 percent.

The broad Asian shares scaled five-month peaks, as market wagers on ever-more aggressive rate cuts extended a huge rally in US stocks and bonds, while also leaving plenty of scope for disappointment in the new year.

Foreign investors bought a net 13.5 billion yuan (US$1.90 billion) of Chinese stocks via the Stock Connect on the day, booking the biggest daily inflow in five months.

In mainland markets, new energy stocks jumped 6.5 percent to lead the gains, while shares in real estate developers, consumer staples and tourism firms rose between 2.8 percent and 3.8 percent.

“In the market, valuation and sentiment indicators are all at record low levels,” said Huajin Securities in a note, adding there is limited room for further decline.

The broker said markets expected possible rate cuts early next year, while recent data showing double-digit gains in November industrial profits also helped sentiment.

China will strive to expand domestic demand, ensure a speedy economic recovery and promote stable growth, according to an interim report on China’s 14th five-year plan published by parliament on Wednesday.

Tech giants listed in Hong Kong gained 3.4 percent.

(Reuters)