Update | Chinese stocks rally by mid-session as PBOC steps up support
Markets extend opening gains through the lunch break
Chinese markets closed Monday’s morning session on a strong note, as positive sentiment lifted the markets after the People’s Bank of China expanded a re-lending pilot programme to more regions in its latest move to increase lending support and bolster economic growth.
Mainland China’s benchmark Shanghai Composite Index climbed 3.38 per cent to 3,290.62, and the large-cap CSI300 Ondex jumped 3.53 to 3,458.08. The Shenzhen Composite Index gained 4.12 per cent to 1,886.34, while the Nasdaq-style ChiNext Index surged 4.97 per cent to 2,326.80.
Hong Kong’s benchmark Hang Seng Index rose 1.4 per cent to 22,763.43 at midsession. The Hang Seng China Enterprises, or the H-shares index, added 2.1 per cent to 10,620.99.
The People’s Bank of China (PBOC) announced Saturday that it would expand a pilot re-lending programme to allow financial institutions to use credit assets as collateral for PBOC funding, to nine provinces and municipalities.
“Although it is not exactly QE, the Chinese central bank still expects to stimulate the slowing economy by easing credit conditions, which will be viewed as a positive factor for markets in the short term, “ said Wang Chong, an analyst for Hong Kong-based Victory Securities.
In Hong Kong, all three of China’s largest telecom companies recorded substantial gains, after state media reported Monday that China Reform Holdings, a state-owned investment firm, plans to invest over 10 billion yuan for a 6 per cent stake in China Tower Corp., a joint venture formed by the three major carriers to pool their tower assets.