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Zhang Shidong

China stocks rose the most in three months on Monday after official data showed that new lending by mainland banks surged to a record in January and on optimism that the Asian nation and the US are close to clinching a deal to resolve their trade dispute. Hong Kong’s shares also rallied.
The Shanghai Composite Index climbed 2.7 per cent, or 71.97 points, to 2,754.36 at the close, taking its gain from a January low to 12 per cent.
Hong Kong’s Hang Seng Index added 1.6 per cent, or 446.17 points, to 28,347.01.
Both gauges slid at least 1.4 per cent on Friday after the statistics bureau said China’s factory-gate prices decelerated for a seventh straight month in January.


Trading values of mainland equities increased to a 10-month high of 547.2 billion yuan (US$80.9 billion) on Monday, with overseas investors buying for a streak of 14 consecutive days through the connect programme with Hong Kong.
The market regained an optimistic mood as traders cheered the news that China’s banks are pumping more money into the real economy that grew at the slowest pace in a decade in the fourth quarter. A report released by the People’s Bank of China after the market close on Friday showed that new yuan loans surged to an all-time high of 3.23 trillion yuan last month.
Aggregate financing, the broadest measure of China’s credit supply including banks’ off-the-balance lending and bond sales, also rose to a record 4.64 trillion yuan and growth in M2 supply rebounded to 8.4 per cent, the report showed. January’s credit data showed a pickup in shadow banking for the first time in a year, probably foreshadowing an inflection point of the contraction in off-the-balance-sheet lending, according to Shenwan Hongyuan Group.
China’s loans hit all-time high as banks open floodgates in January to help slowing economy
The data “indicates an all-out improvement in credit for the real economy,” said Qin Tai, an analyst at the Shanghai-based brokerage. “It will significantly alleviate the concern about a quick drop in economic growth, with infrastructure investment expected to pick up and the progress made on the trade talks.”


Equities got an added boost as US President Donald Trump said the two-day trade talks with China last week were “very productive,” signalling the world’s two largest economies may reach a deal to end the trade war. The two countries said they are working toward a preliminary written agreement, and will continue discussions in Washington next week. The US has threatened to more than double tariffs on $200 billion of Chinese goods after the March 1 deadline that marks the end of a 90-day truce.
Foreign investors bought 5.18 billion of Chinese stocks on Monday, continuing net purchases before a decision by MSCI on whether to quadruple the representation of mainland equities in its benchmarks by the end of the month.
The gains on mainland stocks were broad-based on Monday, with only 13 out of the 3,642 stocks on the Shanghai and Shenzhen bourses falling. Chicken-farming stocks led the pack of gainers on optimism that rising pork prices will boost demand for chicken as alternatives.
Shandong Minhe Animal Husbandry and Shandong Yisheng Livestock & Poultry Breeding both jumped by the 10 per cent daily limit to 18.26 yuan and 22.22 yuan respectively.
Pork producers also advanced on concern the outbreak of African swine fever will strain supply. Hunan New Wellful surged 10 per cent to 6.37 yuan and Muyuan Foodstuff added 3 per cent to 43.60 yuan. Pork prices may have more potential to rise in as early as the second quarter amid short supply, according to Haitong Securities.
In Hong Kong, HSBC Holdings rose 2 per cent to HK$67.70 and Hang Seng Bank gained 1.6 per cent to HK$185.60 yuan. Both lenders are due to release earnings on Tuesday.








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China stock market

China stocks jump most in three months on record new lending and trade deal outlook

People look at an electronic board showing stock information at a brokerage house in Shanghai on July 6, 2018. Photo: Reuters

Business

China Business

Markets

Traders react positively to news that China banks pumped record 3.23 trillion yuan into economy in January
They also liked US President Donald Trump calling last week’s trade talks ‘very productive’


Markets get a boost by news that new yuan loans surged to an all-time high of 3.23 trillion yuan in January.


Stocks

A-shares

Hang Seng Index

China stocks jump most in three months on record new lending and trade deal outlook

Traders react positively to news that China banks pumped record 3.23 trillion yuan into economy in January They also liked US President Donald Trump calling last week’s trade talks ‘very productive’

Traders react positively to news that China banks pumped record 3.23 trillion yuan into economy in January

They also liked US President Donald Trump calling last week’s trade talks ‘very productive’