China stocks at highest in two weeks as PBOC seeks to stabilise yuan
SHANGHAI: Shares in China reached their highest levels in two weeks yesterday, buoyed by a stronger yuan after the central bank moved to keep the currency market stable, boosting airline stocks and other firms with heavy dollar exposure.
The Shanghai Composite index was up 1.7 per cent to 2,776.08 in early afternoon trade.
China’s blue- chip CSI300 index was up 2.2 per cent, while the financial sector sub-index rose 1.3 per cent.
The consumer staples sector gained 3.3 per cent, while the real estate index was up 3.3 per cent and healthcare sub-index rose 3.9 per cent.
Chinese H- shares listed in Hong Kong rose 2.5 per cent at 11,071.01, while the Hang Seng Index was up 2 per cent at 28,222.35.
The yuan hovered at a 2-1/2week high against the US dollar on Monday after China’s central bank revived a ‘counter- cyclical factor’ in its daily fixing to support the currency, arresting a record 10-week slide that has rattled global markets.
The yuan was quoted at 6.8143 per US dollar, 47 pips firmer than the previous close of 6.819.
Airline shares were among the winners on Monday as investors bet that a stronger yuan would boost their bottom lines.
China Southern Airlines gained 4.5 per cent and Air China was up 3.8 per cent.
The smaller Shenzhen index rose 2.3 per cent and the start- up board ChiNext Composite index was higher by 2.9 per cent.
Around the region, MSCI’s Asia ex- Japan stock index was firmer by 1.1 per cent while Japan’s Nikkei index was up 1 per cent.
Shares around the region were supported by Federal Reserve Chair Jerome Powell’s comments on Friday that a gradual approach to raising rates was best to protect the US economy and job growth. — Reuters