Sunday , October 21 2018

China shares post biggest gain in more than two years

Bloomberg

Chinese equities powered higher on Tuesday as the Shanghai Composite Index posted its biggest gain in more than two years. Infrastructure and property companies were some of the best performers after a report in state media raised hopes for further policy support.
The Shanghai benchmark climbed 2.7 percent, its first advance in a week, to close at 2,779 points. The enthusiasm spread to small caps too, as the ChiNext gauge added 2.7 percent, its best day since July 12. Developer China Evergrande Group Co. soared as much as 27 percent in Hong Kong, leading gains on the Hang Seng Composite Index, after issuing a positive profit alert that helped boost the whole property sector.
The China Daily, citing an unidentified official at the National Development and Reform Commission, said the government would
roll out more policies to improve investment appetite, without elaborating. The China Business Journal also reported that rail investment this year may be higher than originally planned. China Railway Construction Corp. was the best performer on the large-cap CSI 300 Index, rising by the 10 percent daily limit.
The China Daily report was the main reason for the rally in stocks, according to Central China Securities strategist Zhang Gang. Sentiment was also helped by news that 14 companies have been approved to introduce new retirement products, as well as a stabilising yuan and positive profit alerts from Evergrande and Country Garden Holdings Co., Zhang said.
The yuan rose 0.23 percent to 6.8360 per dollar, erasing an earlier loss of 0.29 percent as the greenback weakened. The Bloomberg Spot Dollar Index fell 0.2 percent.
Country Garden, one of the worst-performing high profile stocks in Hong Kong this year, led gains on the city’s benchmark Hang Seng Index, rising 6.8 percent. The company said Monday evening that its net income for the six months through June likely rose at least 50 percent. Evergrande, meanwhile, said first-half net profit from its core business would more than double. Van Liu, an analyst at Guotai Junan Securities Co., said the positive profit alerts buoyed earnings optimism for the entire sector.

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