Chinese stocks rise on stimulus, reopening of Shanghai; COVID uncertainty persists

Chinese stocks closed higher after choppy trading on Thursday, as initial euphoria over additional stimulus to support a struggling economy was countered by investor concerns over Beijing’s zero COVID policy and a rebound. potential cases.

The blue-chip CSI300 index rose 0.2% to 4,089.57, while the Shanghai Composite Index gained 0.4% to 3,195.46 points.

The Hang Seng Index fell 1.0% to 21,082.13, while the Chinese Enterprise Index fell 1.1% to 7,267.57 points.

** China’s cabinet said on Wednesday it would increase political banks’ credit quota by 800 billion yuan ($120 billion) for them to support infrastructure construction.

** “With frequent measures introduced to support the economy, A-shares recorded their biggest rebound in May since the correction,” said Chen Mengjie, chief strategist at Yuekai Securities, after the Shanghai Composite Index jumped 4.6% in May, the biggest monthly rebound. go up in a year.

“The market could see a range-bound performance in June, but we are not pessimistic, the darkest hour has passed.”

** China’s cabinet on Tuesday announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy.

**Shanghai came back to life after the financial hub lifted most anti-COVID restrictions, but concerns about a rebound in cases and the zero-COVID policy persisted.

** “Due to the still elevated uncertainty related to COVID, we see large downside risks to our current forecast of 3.9% annual GDP growth for 2022,” Nomura said in a note.

**China will aim to ensure that its grids source electricity from renewable sources by around a third by 2025, up from 28.8% in 2020, the state planning agency said on Wednesday. in a new “five-year plan” for the renewable energy sector.

**New energy stocks rose 2.4%, semiconductors jumped 4.1%, while property developers lost 1.6% and energy stocks fell 2.4%.

**Chinese electric vehicle startups reported stronger sales in May and forecast continued gains for June as supply chains and production begin to recover from the disruption from COVID-19 lockdowns.

** Geopolitically, China “firmly” opposes the launch of the U.S.-Taiwanese 21st Century Trade Initiative, the Commerce Ministry said Thursday, adding that the Chinese government opposes any form official contact between Taiwan and other countries.

**Hong Kong-listed tech giants were down 0.8%, with e-commerce giant Alibaba down 2.4%.

** Mainland promoters trading in Hong Kong were down 2.3%. (Reporting by Shanghai Newsroom; Editing by Uttaresh.V and Mark Potter)

Reuters