China stocks were firm on Monday morning, with investors rotating from property companies back into tech and healthcare, sectors that Beijing hopes will be new engines of growth.
Hong Kong stocks also climbed, after a strong rally in Wall Street, as investors near an expected US rate hike, the first in nearly a decade.
China’s CSI300 index rose 0.5 per cent to 3,694.14 points by lunch break, and the Shanghai Composite Index gained 0.4 per cent to 3,539.04 points.
China’s economic performance
An avalanche of data in coming weeks is likely to show China’s economic performance remains sluggish, reinforcing expectations that Beijing will carry out more stimulus measures in months ahead.
Investors are apparently making their bets on sectors that would benefit from a government-engineered economic restructuring.
Such conviction was bolstered by Premier Li Keqiang’s vow to ruthlessly deal with “zombie’’ firms, which are generally understood to be loss-making companies in sectors such as coal-mining and steel-making.
Shenzhen’s start-up board ChiNext, which hosts many of China’s hi-tech firms, jumped nearly 2 per cent, while an index tracking major healthcare companies advanced 2.4 per cent.
Beijing Tongrentang, a Shanghai-listed maker of traditional Chinese medicine, jumped the maximum allowed 10 per cent.
But property plays — which represent China’s old growth model — pulled back sharply after last week’s rebound triggered by a 33 per cent surge for China Vanke Co.
On Monday, Vanke slumped more than 4 per cent, after disclosing that last week’s jump was the result of Shenzhen Jushenghua Co buying additional shares, and becoming Vanke’s top shareholder.
Brokerages shares also underperformed, amid fears that regulators would widen probe into the industry.
CITIC Securities fell 1.3 per cent. The company had said on Sunday that it was not able to contact two of its top executives, following media reports that they had been asked by authorities to assist in an investigation.
In Hong Kong, the Hang Seng index added 0.4 per cent to 22,327.99 points, and the Hong Kong China Enterprises Index gained 0.3 per cent to 9,866.52.
Energy was the only main sector that fell in morning trading. Investors sold shares in oil giants CNOOC, PetroChina and Sinopec on worries that global oil prices could continue sliding.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.