China and HK stocks climb as Beijing steps up support for virus-hit economyReuters | Hong Kong | Updated: 17-02-2020 10:12 IST | Created: 17-02-2020 10:09 IST
China stocks rallied on Monday, led by start-up companies which surged to a more than three-year high, as Beijing rolled out more support measures to counter the economic impact of the coronavirus outbreak.
The CSI300 index rose 1.2%, to 4,036.38 points at the end of the morning session, while the Shanghai Composite Index gained 1.3%, to 2,955.07 points. The CSI300 has more than recouped the steep losses it suffered on the first trading day following the Lunar New Year break.
The gain was led by tech companies and brokerages but automakers declined. In Hong Kong, the Hang Seng index added 0.5%, to 27,940.81 points, while the Hong Kong China Enterprises Index gained 0.7%, to 10,935.35. The number of reported new cases of coronavirus in China's Hubei province rose on Monday after two days of falls, as authorities imposed tough new restrictions on movement to prevent the spread of the disease which has now killed more than 1,700 people.
Chinese health officials on Sunday said the slowdown in confirned new infections over the two days showed their efforts to halt the spread of the virus were bearing fruit, although international experts say it is too early to say the epidemic has peaked. China's central bank cut the interest rate on its medium-term lending on Monday as policymakers sought to cushion the drag on businesses from the outbreak that has severely disrupted activity.
The move is expected to pave the way for a reduction in the country's benchmark loan prime rate (LPR), which will be announced on Thursday, to lower borrowing costs and ease financial strains on companies hit by the epidemic. On Friday, China's securities watchdog loosened refinancing rules for listed firms, which it said would help companies fight the coronavirus epidemic and resume production.
According to the revised rules, profitability requirements will be scrapped for private placements on Shenzhen's start-up board ChiNext. In additional, ChiNext-listed companies seeking public share sales no longer need to meet certain criteria around leverage ratios. The start-up board index climbed 3.2% to a more than three year high, having gained 18.8% so far this year.
The loosening of the refinancing rules exceeded expectations and could help start-up companies in particular, as growth companies have more demand for refinancing, analysts at Industrial Securities noted in report.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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