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China shares rally to four-month high on rate cuts, recovery hopes

China's benchmark index closed at its highest level in nearly four months on Wednesday, as the central bank's move on rate cuts and the country's improved June factory data continued to fuel hopes for a quicker economic recovery.

Reuters | Updated: 01-07-2020 13:36 IST | Created: 01-07-2020 13:30 IST
China shares rally to four-month high on rate cuts, recovery hopes

China's benchmark index closed at its highest level in nearly four months on Wednesday, as the central bank's move on rate cuts and the country's improved June factory data continued to fuel hopes for a quicker economic recovery. ** At the close, the Shanghai Composite index was up 1.38% at 3,025.98, the highest since March 6. ** The blue-chip CSI300 index was up 2.01%, with its financial sector sub-index higher by 2.66%, the consumer staples sector was up 3.36%, the real estate index up 7.04% and the healthcare sub-index down 1.18%. ** The smaller Shenzhen index ended up 0.79% and the start-up board ChiNext Composite index was weaker by 0.762%. ** China's central bank announced on Tuesday that it would cut the re-discount and re-lending rates by 25 basis points as of July 1, in a move to reduce funding costs for smaller firms and rural sectors. ** China's factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures and ramped up support steps, a survey showed on Wednesday. ** The data suggests some good short-term momentum towards a recovery, Nomura said in a note, and is likely to boost shares driven by the consumption pick-up, according to China Securities. ** Shares of China's biggest liquor makers hit record highs, with Kweichow Moutai Co Ltd rising 2.15% during the day. ** Shares in Chinese developers also gained on recovery hopes, with the CSI300 real estate index rallied 7.04%, marking its best daily session since November 2019. ** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.35%, while Japan's Nikkei index closed down 0.75%. ** At 07:05 GMT, the yuan was quoted at 7.0683 per U.S. dollar, 0.05% weaker than the previous close of 7.065.


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