China stocks rebound; tech shares surge on policy support hopes
The Shanghai Composite index ended 1.9 percent higher, while China's blue-chip CSI300 index closed up 2.5 percent, recouping Wednesday's losses.
Chinese stocks rebounded across the board on Thursday as investors snapped up healthcare and property shares battered by a recent selloff, while tech firms rallied on hopes of more government support.
Assistance for the tech sector would mark the latest in a series of growth-boosting measures being rolled out by Beijing as an escalating trade war with the United States puts more pressure on China's already slowing economy.
Gains were broad-based, with the CSI300's financial sector sub-index rising 2.3 percent, consumer staples up 3 percent, real estate up 3.9 percent and healthcare up 3.8 percent.
Those sectors have been badly mauled in a summer selloff triggered by the Sino-U.S. trade dispute, worries over slowing economic growth and fears of more curbs to cool property prices.
"We could have overestimated the downside risks for the economy, judging from recent economic data including the exports which are not that bad," said Wang Mingli, an analyst with Guoyuan Securities.
China's exports surged more than expected in July despite the imposition of U.S. tariffs, but more duties are on the way.
Beijing late on Wednesday said it would slap additional tariffs of 25 percent on $16 billion worth of U.S. imports, in retaliation to news the United States plans to begin collecting 25 percent extra in tariffs on $16 billion of Chinese goods from Aug. 23.
China's securities regulator said on Wednesday that it would revise regulations to ease companies' access to capital markets and expand the scope of foreign investment.
Technology shares gained after China said it would revamp a national leadership group charged with planning and studying its key technological development strategies, signaling the possibility of policy shifts that could benefit China's tech sector.
But Gao Ting, head of China Strategy at UBS Securities, cautioned against expectations of widespread government support for the market.
"We think the extent of policy loosening this time is likely to be constrained by the government's deleveraging policy stance and concerns of a housing bubble," Gao said in a note, referring to Beijing's multi-year campaign to reduce risks in the financial system and tackle a mountain of corporate debt.
"A delicate policy balance is needed to reduce the risk of a hard-landing and also to avoid the excessive stimulus."
In currency markets, the yuan strengthened after the central bank left the midpoint of the currency's daily trading band essentially unchanged.
At 0719 GMT, the yuan was changing hands at 6.8278 per dollar, 40 pips firmer than the previous onshore close of 6.8318.
Traders said the yuan was slightly stronger as cautious investors liquidated long dollar positions, as they were wary of any potential policy moves to stabilize the Chinese currency.
Several market participants said that Thursday's slight strengthening does not mean the yuan's downward trend has ended.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)