Update | Chinese stocks battle back to end up, Hong Kong shares in the red by the close
Shanghai nudges higher and Shenzhen settles 1 per cent up
Mainland Chinese stocks rose on Wednesday, a rare bright spot in regional markets, after mainland media reports late on Tuesday said the authorities had injected billions of dollars into its three policy lenders to spur economic growth.
The Shanghai Composite Index recovered from afternoon weakness to post its fifth consecutive daily gain, rising 0.22 per cent to close at 4,026.70. The tech-heavy Shenzhen Composite Index rose 1.01 per cent to 2,287.98 and the Nasdaq-style ChiNext board added 0.5 per cent to 2,897.37.
Turnover on the mainland’s two bourses improved to 1.28 trillion yuan, up from 1.21 trillion yuan on Tuesday.
The People’s Bank of China had injected US$48 billion into China Development Bank and US$45 billion into Export-Import Bank of China, the Caixin business news outlet reported. Other mainland media reported separately that the Ministry of Finance had injected 100 billion yuan (US$16 billion) into the Agricultural Development Bank of China.
Despite the latest market-boosting measures, all major lenders, insurance companies and brokerage firms finished down on Wednesday. In addition to injecting capital into lenders, the mainland central bank previously pledged to provide liquidity to the mainland’s only provider of margin financing loan services, which was seen as a rare endorsement for retail investors to borrow money to buy and sell stocks.
Shares in oil majors were mixed. PetroChina rose 1.11 per cent to 13.63 yuan, while Sinopec fell 0.57 per cent to 6.99 yuan.
Both the stocks traded down in Hong Kong, even though crude oil futures have been steady this week after tumbling to three-months lows earlier this month amid market oversupply.
Japan’s Nikkei 225 Index and Australia’s S&P ASX 200 Index closed lower, with the regional benchmark MSCI Asia Apex 50 shedding 0.9 per cent.
Hong Kong stocks were largely in the red, after indicators of consumer and business confidence showed a cautious mood.
The Hang Seng Index dropped 1 per cent to close at 25,282.62, with HK$82 billion worth of shares exchanging hands. The H-share index slipped 1.16 per cent to 11,734.27, dragged down by insurers People’s Insurance Co (Group) of China and New China Life, each of which dropped more than 4 per cent.
“There weren’t major macro developments this morning and currently the mood in the market seems to be rather neutral,” said Gerry Alonso of Shenwan Hongyuan Securities. “The amount of companies resuming trading [on the mainland] after the recent massive halt continues to increase, with no obvious impact on the overall market. The decrease in volatility is likely welcomed by long-term investors.”
The ANZ-Roy Morgan China consumer confidence index dropped 2.5 per cent in June to 141, the lowest level since the index was launched in January last year, while the MNI China Business Indicator fell to 48.8 in July, down from June’s reading of 53.5, indicating a pessimistic outlook.
