Shares in China and Hong Kong
climbed on Monday despite the Chinese economy reporting its
slowest annual expansion in 28 years, as investors bet on
Beijing to spend more to prop up growth.
** At the midday break, the Shanghai Composite index was
up 0.7 percent at 2,613.53 points.
** China's blue-chip CSI300 index also gained 0.7
percent, with its financial sector sub-index higher
by 0.4 percent, the consumer staples sector up 1.1
percent, and the healthcare sub-index up 0.8
percent.
** Chinese H-shares listed in Hong Kong rose 0.6
percent, while the Hang Seng Index advanced 0.3 percent
at 27,181.91 points.
** The smaller Shenzhen index rose 0.8 percent and the
start-up board ChiNext Composite index edged up 0.9
percent.
** China's economic growth cooled slightly to 6.4 percent in the
fourth quarter from a year earlier, weighed down by weak
investment and faltering consumer confidence and the trade war
with the U.S., leaving 2018 growth at 6.6 percent, the weakest
since 1990.
** But the market stayed put because investors "already knew
that the economy was slowing down, and we can expect more
supportive policies," said Larry Hu, an economist at Macquarie
Capital in Hong Kong.
** However, pressure on share prices may come "in the next few
months (when) we see data continue to worsen and corporate
earnings will be revised down," he added.
** Analysts polled by Reuters see GDP growth slowing to 6.3
percent before the impact of government stimulus kicks in.
** There will be more support for Chinese equities when China
cuts taxes later this year, said Patrick Yiu, managing director
at CASH Asset Management in Hong Kong, who is limiting his
A-share exposure for now.
** "So far the money (from policy loosening) has gone to the
banks, and not a lot of that has flown into the stock market.
But with tax cuts, people will spend, and we will see the impact
of that faster," he said.
** Shares in Chinese consumer firms extend gains despite the
soft GDP figures as investors expect more stimulus measure to
spur the country's consumption.
** China's Finance Ministry on Friday announced further tax cuts
for small companies as part of an effort to create jobs and
promote economic stability.
** Around the region, MSCI's Asia ex-Japan stock index
was firmer by 0.1 percent while Japan's Nikkei
index gained 0.3 percent.
** At 0409 GMT, the yuan was quoted at 6.7884 per
U.S. dollar, 0.13 percent weaker than the previous close of
6.7795.
** The largest percentage gainers in the main Shanghai Composite
index were Citic Guoan Wine Co Ltd, up 10.2 percent,
followed by Shanghai Hongda Mining Co Ltd, gaining
10.1 percent and Anhui Quanchai Engine Co Ltd, up by
9.9 percent.
** As of midday, China's A-shares were trading at a premium of
17.81 percent over the Hong Kong-listed H-shares.(Reporting by Noah Sin; Editing by Shreejay Sinha)
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