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SHANGHAI, Jan.5 (Reuters) – China’s blue chip index extended its gains to a five-and-a-half-year high on Tuesday, helped by jumps in consumer stocks, as investors hoped for more measures to boost the country’s consumption amid the coronavirus epidemic.
** The blue-chip CSI300 index rose 1.9% to 5,368.50, its highest level since June 9, 2015, while the Shanghai Composite Index gained 0.7% to 3,528 , 68.
** Leading the gains, the CSI300 Consumer Staples Index jumped 5.1%. The CSI300 health index and the materials index rose 2.2% and 2.6% respectively.
** “Investors could pay attention to the resumption of resident incomes and measures to stimulate consumption in 2021, as the recovery in consumption in China was relatively weak in 2020 amid the coronavirus epidemic”, Luo Kun, director of the macro strategy center at Chasing Securities, noted in a report.
** Analysts and traders also said investors have become more bullish in the hope of greater political support and sufficient liquidity.
** “The spring rally has come now that investors are expecting more political support from Beijing and banks typically lend more at the start of a new year, which would mean more liquidity in the market,” Fu Yanping said , analyst at China Galaxy Titres.
** Fu said risk appetite was also boosted as Beijing pledged to continue supporting its policy and the Sino-EU investment deal.
** China said last year it would maintain support for its economic recovery, avoiding a sudden change in policy, to help keep growth within a reasonable range in 2021.
** In the region, the MSCI Asia ex-Japan stock index was firmer by 1.12%, while the Japanese Nikkei index closed down 0.37%.
** As of 07:20 GMT, the yuan was traded at 6.46 to the US dollar, 0.03% firmer than the previous close of 6.462. (Reporting by Shanghai Newsroom; editing by Shailesh Kuber)
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