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China shares rose on Wednesday, driven by hopes of more stimulus on the mainland to support a slowing economy and by a rebound in US stock markets.
The CSI300 index of the largest companies listed in Shenzhen and Shanghai rose 10.022 points or 0.41 per cent in the morning session to 2,443.413, the Shanghai Composite Index gained 8.8227 points or 0.38 per cent to 2,348.4797.
“The rise can be attributed to the market’s bullish sentiment on more policy support to come in the future,’’ said Du Changchun, an analyst at Northeast Securities in Shanghai.
“Investors are closely watching the ongoing party meeting.’’
China posted 7.3 per cent GDP growth in the third quarter, official data showed on Tuesday, putting its official 7.5 per cent annual growth target at risk, and leading many economists to intensify calls for more monetary easing.
Chinese stock markets are usually more responsive to liquidity conditions than economic fundamentals, and stock market investors are closely watching to see whether slowing growth will prompt the central bank to boost money supply through a cut in bank reserve requirement ratios.
Mainland markets were lifted in particular by airline stocks, which have been performing strongly in the face of sliding oil prices, which analysts said are being read as positive for profit margins.
The Hang Seng Index added 302.57 points or 1.31 per cent to 23,391.15, with the China Enterprises sub-index outperforming to rise 1.7 per cent. The Hang Seng is set for its best daily gain since early September.
Analysts said a rebound in US stock markets, to which Hong Kong investors are more attuned, played a major role in the rise.
Analyst said tension between Hong Kong government leaders and pro-democracy protesters has been slightly alleviated after a dialogue on Tuesday, though it failed to produce any breakthrough.
“GDP data has some positive impact on the market, and GDP was more optimistic than the formerly released CPI data,’’ said Ying Hao, analyst at Yuanta Securities in Shanghai.
The October HSBC/Markit flash Purchasing Managers’ Index (PMI) is due on Thursday, which investors expect may cause regulators to introduce additional stimulus to the market, Ying added.
Technology shares rallied following gains from their US peers. Analysts said reports that Tencent Holdings would set up a cross-boarder online trading platform with a Taiwan company, sparked a 3.2 per cent rise in its shares in morning trade, making it the biggest gainer on the HSI.
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