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China Market gains on stimulus hopes

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The Mainland China equity market closed on Friday, 16 August 2019, as risk sentiments improved on hopes that the Chinese government will dip into its coffers to provide financial stimulus to keep the economy growing. At closing bell, the benchmark Shanghai Composite Index advanced 0.28%, or 8.03 points, to 2,823.82. The Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.55%, or 8.41 points, to 1,525.48. The blue-chip CSI300 index grew 0.45%, or 16.54 points, to 3,710.54.

Shares of consumer linked companies gained on hopes of China's government stimulus measures after official retail sales earlier in the week were weaker-than-expected. Traders are optimistic about the consumer market in mainland China, because they expect the government is going to use fiscal policies to stimulate the economy. Consumer market is the main indicator of the economy.

The government is likely to further reduce tax in the second half of the year. China's state planner said on Friday it will roll out a plan to boost disposable income this year and in 2020 to spur consumption as the economy slows, but it gave few details. Among consumer stocks, China Resources Beer Holdings - the country's biggest brewer who has a partnership with Dutch brewer Heineken - rose 7.8% to a record 39.2 yuan, after posting a 24.7% annual increase in net profit, and a 7.2% gain in revenue. Tsingtao's shares rose by their daily 10% limit, in line with liquor makers across the board. Kweichow Moutai, the world's largest distiller, climbed 0.9% to 1,054.60 yuan, while the industry's second-in-line Wuliangye Yibin rose 0.3% to 126.30 yuan.

CURRENCY NEWS: The People's Bank of China's fixed its midpoint for the yuan at 7.0312 against the dollar on Friday, weaker by 0.06% from 7.0268 on Thursday. The spot yuan last traded at 7.039 against the greenback, down by 0.08% from 7.0333 a day earlier.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, August 16 2019. 16:07 IST
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