Daily Report

Shanghai, Hong Kong stocks extend gains as investors brace for China quarterly GDP data

China will release first quarter GDP statistics on Friday, alongside retail sales, factory output, and fixed asset investment

PUBLISHED : Thursday, 14 April, 2016, 9:16am
UPDATED : Thursday, 14 April, 2016, 5:41pm

Chinese stocks ended higher after a seesaw session, building on a string of recent gains sparked by upbeat trade data, as investors braced for China’s quarterly GDP growth statistics due out Friday and further clues of the health of Chinese economy.

Hong Kong stocks also extended gains into a seventh session, led by gains in financial shares.

The Shanghai Composite Index spent much of the day swinging between small gains and losses before turning higher in the final hour of trading, closing at 3,082.87, up 0.5 per cent or 15.72 points. On Wednesday the index advanced 1.4 per cent to end at a three-month high, after stronger-than-expected trade data pointed to improving economic conditions.

In Thursday’s session the CSI300 closed up 0.4 per cent or 14.45 points at 3,275.83. The Shenzhen Composite Index rose 1 per cent or 20.02 points to 1,982.45. The startup-focused index ChiNext added 1.3 per cent or 30.38 points to 2,324.39.

Turnover for Shanghai and Shenzhen decreased to 625 billion yuan (HK$747.76 billion), down 24 per cent from 824 billion yuan on Wednesday.

“Investors are closely watching tomorrow’s Chinese GDP statistics,” said analysts from Bright Smart Securities in a note.

“The market expects the Chinese economy to grow 6.7 per cent in the first quarter. If data comes out as expected, it will give further momentum to stocks in China and Hong Kong in the near term,” they said.

China is set to release Q1 GDP statistics on Friday, alongside retail sales, factory output, and fixed asset investment.

In Hong Kong, the Hang Seng Index posted a seventh day of gains, rising 0.9 per cent or 179.10 points to 21,337.81. The benchmark rallied more than 3 per cent on Wednesday to its highest settlement in more than three months, with a 80 per cent spike in turnover to HK$94 billion.

Nevertheless, Thursday’s turnover shrank sharply to HK$49 billion.

Statistics showed more funds are flowing into mainland Chinese equity markets. The southbound quota for the Shanghai-Hong Kong Stock Connect scheme, which indicates how much mainlanders invest in Hong Kong equities, recorded net outflows of 36 million yuan. Meantime, the northbound quota, which reflected foreigners’ investment in Shanghai stocks, saw inflows of 1.9 billion yuan, the sixth straight day of capital inflows.

In mainland China, brokerages advanced broadly, after media reports said the top securities regulator is drafting new rules to allow brokerage firms to negotiate commission rates with clients. Huatai Securities climbed 2.2 per cent to 17.98 yuan, Everbright Securities rose 1 per cent to 19.76 yuan, and Citic Securities tacked on 0.8 per cent to 18 yuan.

In Hong Kong, financial shares were among top outperformers. China Taiping Insurance jumped 3.2 per cent to HK$17.68 yuan, China Life Insurance rose 3 per cent to HK$19.74, and Bank of China snagged a 0.9 per cent gain at HK$3.24.

Among other market movers, China Eastern Airlines’ Shanghai shares climbed 2 per cent to 6.21 yuan, and its H shares added 1.3 per cent to HK$4.64. The carrier expects its net profit for the first quarter to rise 60 per cent to 70 per cent from a year earlier, according to a Hong Kong stock exchange filing Wednesday night.

With additional reporting from Jennifer Li.