Shanghai stocks settle at 15-month high, led by new economic zone plan
SHANGHAI: China stocks rose yesterday to post their best week since late November, led by the Shanghai benchmark closing at a 15-month high, with risk appetite lifted by Beijing’s decision to launch a new economic zone in Hebei province.
The blue- chip CSI300 index rose 0.1 per cent to 3,517.46 points, while the Shanghai Composite Index added 0.2 per cent to 3,286.62 points.
For the week, CSI300 was up 1.8 per cent, while SSEC gained 2 per cent.
The market seemed unfazed after the US launched missile strikes against a Syrian airbase.
Most of the attention was focused on the new Xiongan special zone, described as ‘a thousandyear project’, with dozens of stocks related to the plan surging the 10 per cent trade limit for the third session in a row.
Among best performers were infrastructure stocks, widely seen benefiting from the development of the special zone, which would be modelled on the Shenzhen Special Economic Zone that helped kickstart China’s economic reforms in 1980.
For the week, an index tracking major infrastructure players advanced 5.1 per cent to a 15-month high.
Many domestic brokerage firms expect the initiative to become a strong investment theme in coming months, given the prominence of the plan.
Eyes were also on President Donald Trump’s first face-to-face meeting with Chinese President Xi Jinping, with trade and security issues set to figure prominently in the talks.
Sentiment would be lifted if Trump softens his initial tough attitude with China in the meeting, said Linus Yip, strategist at First Shanghai Securities.
Concerns over a liquidity squeeze seemed to have eased, even as the central bank had skipped open market operations for the 10th straight session, citing “relatively high liquidity level in the banking system”.
Elsewhere, a flurry of data in coming weeks is expected to show solid economic growth in China in March, though many analysts expect the pace to moderate in coming months as the impact of earlier stimulus fades and measures to cool the heated property market take effect. — Reuters