China shares set for best month in nearly a decade on stimulus cheer By Reuters
SHANGHAI/SINGAPORE (Reuters) – Chinese stocks extended a sharp rally on Monday with the continent heading for its best month in nearly a decade, as Beijing rolled out more stimulus measures to stem a broader economic slowdown.
China's benchmark indexes started the week on a strong footing after posting their best weekly performance in nearly 16 years on Friday, with the blue-chip CSI300 index ending up 6.22%.
It increased by 5.7%, while Hong Kong increased by 3.34%.
Shares of real estate companies rose sharply in response to China's central bank late on Sunday saying it would tell banks to lower loan rates for existing mortgages before Oct. 31, as part of policies to support the country's real estate market.
Adding to efforts to reverse the housing slump, the city of Guangzhou announced on the same day the removal of all restrictions on housing purchases, while Shanghai and Shenzhen eased restrictions on purchases.
“The market is still surprised by China's policy support and momentum continues,” said Kenny Ng, strategist at China Everbright (OTC:) Securities International in Hong Kong.
Mainland-listed property stocks advanced 6.4%, while the Hang Seng Mainland Properties Index was 8.4% higher.
Consumer staples stocks were last trading up 7%. The smaller Shenzhen index rose 8.2%.
This month, the CSI300 index was looking for a gain of more than 18%, its best performance since December 2014. The Shanghai Composite Index is on track to end September with a 14.8% gain, the biggest since April 2015.
The Hang Seng index was set for its best month since November 2022 with a rise of 14.7%.
“The coordinated stimulus blitz suggests that China has reached 'whatever it takes' and economic risks are bordering on Beijing's pain points,” said Eli Lee, chief investment strategist at the Bank of Singapore.
“Without a short-term reversal, although it's still too early to assess, we can't wait to see if this could be the start of a bull market if Beijing delivers enough momentum to successfully turn things around.”
Sunday's events were the latest in a series of stimulus measures announced by Beijing over the past week – from tariff cuts to fiscal support – in an effort to shore up its faltering economy.
That lit a fire under Chinese currencies that had been in a near multiyear slump earlier this month, as investors worried about China's growth prospects.
Especially in raising stocks, the People's Bank of China's (PBOC) also introduced two new tools to develop the capital market, one of which includes an exchange system that allows funds, insurers and consumers to easily access funding to buy stocks.
The CSI300 index rose nearly 16% last week after the announcements and the broader Shanghai composite jumped nearly 13%, both posting their biggest weekly gains since November 2008. The Hang Seng Index also posted its biggest weekly high since 1998, and fifth. the largest in the last half of the century. (This story has been corrected to remove 'Hong Kong' from section 2)
