China’s CSI 300 Index rose 2.4% to a two-month high, driven by consumer shares amid expectations of policy support. Upcoming government measures to boost consumption were announced, contributing to market optimism. Gains were observed across various sectors, with significant increases in consumer staples and banking stocks, reflecting investors’ positive outlook on economic data.

On Friday, China’s benchmark stock index, the CSI 300 Index, surged to its highest level in two months, closing 2.4% higher. This increase was predominantly fueled by consumer shares, amid anticipations of forthcoming policy support for this sector. The rise coincides with an impending press conference slated for Monday, where officials from several government entities will announce measures aimed at bolstering consumption. The associated Chinese stock gauge traded in Hong Kong also saw a rise of 2.8%, as reported by News.Az, citing Bloomberg.

The gains observed on Friday reflect a rejuvenated optimism surrounding policy stimulus, particularly following the government’s ambitious economic growth target of about 5% announced at the recent National People’s Congress meeting. Notably, all ten sector gauges within the CSI 300 advanced, illustrating a broader tech-driven rally in the Chinese stock market. Analysts, such as Ken Chen from KGI Securities, anticipate announcements regarding consumer trade-in subsidies and enhancements to the social safety network, including childcare and elderly care.

To further stimulate consumption, China’s financial regulator plans to promote consumer finance through measures that encourage banks to expedite the issuance of personal-consumption loans. They have also committed to enhancing financing support for service industries like retail, healthcare, and tourism.

Particularly noteworthy was a sub-gauge of consumer staples that experienced a surge exceeding 5%, marking its most substantial gain since November 7. Key players, including liquor producers Kweichow Moutai Co. and Wuliangye Yibin, each increased by over 5%. Furthermore, shares associated with childbirth, such as Beingmate Co. and Shanghai Aiyingshi Co., reached the daily limit of a 10% increase due to local government childcare subsidies.

The sentiment shift is attributed to the NPC’s emphasis on consumption as a key priority since President Xi Jinping took office. Despite the scarcity of details concerning the new plans, market analysts have begun recommending investments in consumer stocks. Additionally, Chinese banking stocks rose as investors anticipated a potential reduction in the banks’ reserve requirement ratio, which would facilitate increased lending. This optimism followed the central bank’s commitment to adjusting ratios and interest rates as necessary to support economic growth.

Market participants are also looking forward to upcoming economic data set to be released on Monday at 10 a.m. local time. Forecasts suggest improvements in retail sales and stable investment levels compared to last year’s full-year figures, according to an economist survey conducted by Bloomberg.

In summary, China’s benchmark stock index has reached a two-month high, spurred by expectations of enhanced policy support for the consumer sector. The government’s ambitious growth target and upcoming announcements regarding consumption measures have contributed to a positive market sentiment. Notable gains occurred in consumer staples and banking stocks, reflecting investor optimism regarding future economic data. Overall, this trend indicates a potential revival in China’s economic activity as it prioritizes consumer spending.

Original Source: news.az

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