China stocks hit over 2-month high as inflation fears fade; Hong Kong up
- 25th May 2021
- Posted by: Hakeem
- Category: Stock
* SSEC 1.6%, CSI300 2.1%, HSI 1.3%
* HK->Shanghai Connect daily quota used 16.6%, Shanghai->HK daily quota used 5.5%
* FTSE China A50 +2.8%
SHANGHAI, May 25 (Reuters) – China’s major stock indexes scaled their highest in more than two months on Tuesday, led by consumer and financial firms, as inflation fears faded at home and abroad.
** The CSI300 index rose 2.1% to 5,261.74 points at the end of the morning session, highest since March 8, while the Shanghai Composite Index gained 1.6% to 3,553.21 points, its best level since March 3.
** Leading the gains, the CSI300 consumer staples index and the CSI300 financials index advanced 3.5% and 2.6%, respectively.
** The gains in commodities prices have been basically contained, decreasing the worries over inflation and its transmission, said Yan Jinkui, an analyst with Caida Securities.
** Beijing has vowed to maintain stability in the country’s commodities markets after prices rallied earlier this year.
** In the latest move, China’s market regulators warned industrial metal companies to maintain “normal market order” during talks on the sharp price gains.
** Inflation fears also faded overseas. The U.S. national activity index reading of 0.24 against expectations above 1, along with dovish comments from Federal Reserve speakers, supported the view that policy will remain on hold for some time.
** Analysts and traders also said a stronger yuan helped stocks by attracting more foreign inflows.
** Caida’s Yan said the dollar is on a declining trend, while China’s yuan has further room to rise for the long term.
** China’s onshore spot yuan strengthened past 6.41 per dollar for first time since June 2018 in early morning trade.
** By midday, investors had purchased a net 11.4 billion yuan ($1.78 billion) worth of A-shares via the Stock Connect linking the mainland and Hong Kong, according to Refinitiv data.
** In Hong Kong, the Hang Seng index added 1.3% to 28,770.65 points, while the Hong Kong China Enterprises Index gained 1.0% to 10,742.70. ($1 = 6.4115 Chinese yuan renminbi) (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Devika Syamnath)