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Chinese stocks rise as government pledges stimulus package

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Chinese stocks surged on Tuesday, led by gains in real estate and tech stocks, after the country’s ruling political bureau pledged to boost jobs, step up support for the property sector and revive a “tortuous” economic recovery.

Mainland China’s CSI300 index rose 2.8%, while Hong Kong’s Hang Seng Index rose 3.4%. The Hang Seng Mainland Property Index and Hang Seng Tech Index also rose significantly, up 11.9% and 4.6%, respectively.

Hong Kong-listed shares of Country Garden, China’s largest developer by revenue, rose 14.3% after falling 9% on Monday as the sector fell. Among major tech stocks, e-commerce platform JD.com and search engine group Baidu both rose 6.9%.

China’s stock exchange outperformed broader regional equities, while Korea’s Kospi Japan’s TOPIX both flattened out in the afternoon.

investors were watching China’s 24-strong Politburo members meet on Monday The country’s economy rebounded strongly early this year following the lifting of its zero-corona measures, but has since lost momentum.

The group acknowledged that the economy had made “serpentine progress” and said it would work to combat unemployment, accelerate the issuance of special municipal bonds and boost consumption of goods such as electronics and electric vehicles.

He added that the government would try to “stabilize” foreign investment and trade, which has been weighed down in recent months, and increase international flights, which have yet to fully recover from the pandemic.

The economy has been plagued by sluggish consumption, tight liquidity in the property sector and weak manufacturing, all of which support economic growth. Less than 1% in Q2 Comparison with last 3 months. The Politburo said on Monday that “there is a need to actively expand domestic demand” and “expand consumption by increasing residents’ incomes”.

Pointing to various challenges to the economy, Goldman Sachs analysts said the Politburo was “slightly more dovish than expected” and expected more policy support in the coming months.

But economists cautioned that the announcement skimped on details. Tuesday’s gains saw Chinese stocks gain just 0.3% since the start of the year and fall almost 3% in dollar terms, well short of the nearly 20% rise of the S&P 500 and the double-digit gains of peers in the region.

“We will reserve judgment until we hear more,” said Robert Carnell, head of Asia-Pacific research at ING. We already make a lot of vague promises, but so far it’s not going to be a big deal. “

Tuesday’s move also comes ahead of a busy week of central bank meetings and monetary policy announcements. The US Federal Reserve will release its monetary policy decision on Wednesday, while the European Central Bank and Bank of Japan will decide interest rates on Thursday and Friday respectively.

Wall Street’s benchmark S&P 500 index closed 0.4% higher on Monday, led by energy and financial stocks after a closely watched business survey pointed to slower-than-expected U.S. economic growth in July and waning hopes of another Federal Reserve rate hike. The tech-heavy Nasdaq Composite Index rose 0.2%.

Oil prices also rose slightly on Tuesday, with international benchmark Brent crude rising 0.2% to $82.93 and US benchmark West Texas Intermediate rising 0.3% to $78.95.

Two-year and 10-year U.S. Treasury yields were broadly flat.

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Chinese stocks surged on Tuesday, led by gains in real estate and tech stocks, after the country’s ruling political bureau pledged to boost jobs, step up support for the property sector and revive a “tortuous” economic recovery.Mainland China’s CSI300 index rose 2.8%, while Hong Kong’s Hang Seng Index rose 3.4%. The Hang Seng Mainland Property Index and Hang Seng Tech Index also rose significantly, up 11.9% and 4.6%, respectively.Hong Kong-listed shares of Country Garden, China’s largest developer by revenue, rose 14.3% after falling 9% on Monday as the sector fell. Among major tech stocks, e-commerce platform JD.com and search engine group Baidu both rose 6.9%.China’s stock exchange outperformed broader regional equities, while Korea’s Kospi Japan’s TOPIX both flattened out in the afternoon.investors were watching China’s 24-strong Politburo members meet on Monday The country’s economy rebounded strongly early this year following the lifting of its zero-corona measures, but has since lost momentum.The group acknowledged that the economy had made “serpentine progress” and said it would work to combat unemployment, accelerate the issuance of special municipal bonds and boost consumption of goods such as electronics and electric vehicles.He added that the government would try to “stabilize” foreign investment and trade, which has been weighed down in recent months, and increase international flights, which have yet to fully recover from the pandemic.The economy has been plagued by sluggish consumption, tight liquidity in the property sector and weak manufacturing, all of which support economic growth. Less than 1% in Q2 Comparison with last 3 months. The Politburo said on Monday that “there is a need to actively expand domestic demand” and “expand consumption by increasing residents’ incomes”.Pointing to various challenges to the economy, Goldman Sachs analysts said the Politburo was “slightly more dovish than expected” and expected more policy support in the coming months.But economists cautioned that the announcement skimped on details. Tuesday’s gains saw Chinese stocks gain just 0.3% since the start of the year and fall almost 3% in dollar terms, well short of the nearly 20% rise of the S&P 500 and the double-digit gains of peers in the region.“We will reserve judgment until we hear more,” said Robert Carnell, head of Asia-Pacific research at ING. We already make a lot of vague promises, but so far it’s not going to be a big deal. ”

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Tuesday’s move also comes ahead of a busy week of central bank meetings and monetary policy announcements. The US Federal Reserve will release its monetary policy decision on Wednesday, while the European Central Bank and Bank of Japan will decide interest rates on Thursday and Friday respectively.Wall Street’s benchmark S&P 500 index closed 0.4% higher on Monday, led by energy and financial stocks after a closely watched business survey pointed to slower-than-expected U.S. economic growth in July and waning hopes of another Federal Reserve rate hike. The tech-heavy Nasdaq Composite Index rose 0.2%.Oil prices also rose slightly on Tuesday, with international benchmark Brent crude rising 0.2% to $82.93 and US benchmark West Texas Intermediate rising 0.3% to $78.95.Two-year and 10-year U.S. Treasury yields were broadly flat.
https://www.ft.com/content/3798901f-e821-407e-9710-d89e473b0d2b Chinese stocks rise as government pledges stimulus package

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