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China stocks log best month in two years on recovery hopes, easing Covid-19 curbs
SHANGHAI: Chinese stocks marked their best month in nearly two years on Thursday (June 30), supported by signs of an economic recovery after the easing of Covid-19 restrictions.
However, in Hong Kong, the benchmark Hang Seng Index slipped 0.62% to 21,859.79 points at the close, while Chinese H-shares listed in Hong Kong edged down 0.36% to 7,666.88 points.
By the end of the session, the Shanghai Composite Index rose 1.1% to 3,398.62 points, while the blue-chip CSI 300 Index gained 1.44% to 4,485.01 points. Both indicesrecorded their biggest monthly gains since July 2020.
Gains across the board came as official data showed that China's factory and service sectors snapped three months of activity decline in June as authorities lifted a strict Covid-19 lockdown in Shanghai, reviving output and consumer spending.
China's central bank needs to keep cuts to interest rates and banks' reserve requirement ratio among its policy options while waiting for the economy to bounce back, said Guan Tao, a former senior official at the country's foreign exchange regulator.
Analysts said hopes for more stimulus measures, including monetary easing, continued to lend support to markets.
"In the early stage of economic recovery, regardless of the pace of growth, monetary policy at least favours an easing bias," said Zhang Jingjing, the chief macro analyst of China Merchants Securities.
The latest easing of coronavirus travel rules combined with other encouraging policy signals have begun to lure some foreign investors back to Chinese stocks, raising the chances that the market can sustain its bounce after months of heavy selling.
Official data showed that foreign investors bought 139.15 billion yuan (US$20.79 billion) of Chinese stocks this month through the Stock Connect scheme, the most this year.
Tourism and liquor sectors were among the biggest winners as easing coronavirus restrictions boosted investor sentiment. An index tracking tourism-related companies jumped 4.1% at the close.
CSI liquor, a gauge that measures the performance of spirits producers, rose 3.74% on Thursday. Wuliangye Yibin Co Ltd jumped 5.17% to 201.93 yuan, while Kweichow Moutai surged 1.83% to 2,045 yuan at the close.
- Reuters
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