Shares in Chinese rail and building material companies bounced higher on Tuesday morning fuelled by optimism that plans to boost railway expansion would ease a glut in sectors such as steel and cement.
The Chinese government planned to use investments in high-speed railways to help reduce overcapacity in those and other construction material sectors, the official Shanghai Securities News reported on Tuesday.
By 0220 GMT, shares of China Railway Construction jumped 5 per cent in Hong Kong and 6.1 per cent in Shanghai.
Anhui Conch Cement rose 1.1 per cent in Hong Kong and 1.4 per cent in Shanghai. The Shanghai materials sub-index was a standout outperformer among sectors, rising 3.2 per cent.
The report, along with reported comments from the country’s Premier Li Keqiang and Vice Premier Zhang Gaoli, helped lift stock markets in Hong Kong and China in rising volumes. The China Enterprises Index of the top Chinese listings in Hong Kong jumped more than 3 per cent.
The newspaper said, citing unnamed sources close to the government, that the railway department had completed only one third of its planned investment in the first half of this year, so there would be room for a quicker pace of investment in the second half of this year.