China shares rise as upbeat U.S. China relations, recovery hopes lift sentiment

Shares in China and Hong Kong eked out small gains on Thursday after U.S. President Joe Biden said Washington's relations with Beijing have not worsened since America shot down a suspected Chinese spy balloon, while investors remained hopeful of China's economic recovery. ** China's blue-chip CSI 300 Index rose 0.75%, while the Shanghai Composite Index climbed 0.62%.

Shares in China and Hong Kong eked out small gains on Thursday after U.S. President Joe Biden said Washington's relations with Beijing have not worsened since America shot down a suspected Chinese spy balloon, while investors remained hopeful of China's economic recovery.

** China's blue-chip CSI 300 Index rose 0.75%, while the Shanghai Composite Index climbed 0.62%. ** Hang Seng Index rose 0.34% and Hang Seng China Enterprises Index added 0.31%.

** Asian shares tracked Wall Street lower on Thursday, as a number of Federal Reserve speakers echoed Chair Jerome Powell in saying that interest rates are set to go higher. ** The CSI Liquor index gained 2.71% after Bloomberg reported on Wednesday an IPO plan by Chinese white liquor maker Guizhou Guotai Liquor seeking to raise $500 million in Hong Kong.

** Other liquor makers Wuliangyi Yibin up 3.23% in Shenzhen; Kweichow Maotai adds 1.77% in Shanghai, both hitting their highest levels this week. ** A recovery in consumption-led activity will take shape from the first quarter onwards, according to a UBP report. UBP has revised its GDP forecast for 2023 to 6% from 5.2% previously.

** "Recently A-share market sentiment has retreated marginally. Some investors are monitoring the strength and pace of the economic recovery this year and thus they choose profit-taking in the near term," said Lei Meng, UBS Securities' China equities strategist in note. ** Meanwhile, net inflow into the A share market via the northbound stock connect has been down since end January, while turnover dropped since Feb. 2.

** January northbound net inflow totalled 141.3 billion yuan, its biggest monthly flow on record. ** Offshore mutual funds which invest in A shares recently cut positions, UBS said.

** "We expect to see some more net inflows of long-term foreign capital into the A-share market as more evidence of economic recovery surface;" northbound net inflow could top 300 billion yuan this year," Meng said. ** Xiaomi led the gains in the Hang Seng Index , up 4.17%

** But capping the upside was Baidu, with a 5.34% drop in Hong Kong shares. The drop in index came after a 15% jump on Tuesday on news about their ChatGPT-like AI chatbot called Ernie Bot. ** China's state media The Securities Times ran a front-page editorial Tuesday warning of the risks in speculating on stocks riding on the recent ChatGPT hype.

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