China, HK stocks jump on Silk Road initiatives, easing hopes
By Samuel Shen and Pete Sweeney
SHANGHAI, March 30 (Reuters) - Chinese stocks surged to seven-year highs on Monday, while the Hong Kong market posted its biggest daily gain in two months, as investors bet more infrastructure spending and policy stimulus would re-energise China's cooling economy.
China's main indexes, the CSI300 and the Shanghai Composite Index, both jumped nearly 3 percent to the highest level since March 2008, while Hong Kong's benchmark Hang Seng index rose 1.5 percent, the biggest daily gain in two months.
Over the weekend, China unveiled details of its blueprint for a modern Silk Road to improve links from Asia to Europe and Africa, an ambitious initiative that could translate into a new wave of investment.
Analysts say "Silk Road"-related investment, which this year alone could reach 300 billion to 400 billion yuan ($48-64 billion), would benefit a wide range of companies including port operators, train makers and steel producers.
"The initiative is a boon to many of China's struggling industries," said Alex Kwok, Hong Kong-based strategist at China Investment Securities (HK).
Also fuelling the stock rally were dovish comments by central bank Governor Zhou Xiaochuan, Kwok said. Zhou warned on Sunday that the country needed to be vigilant for signs of deflation.
"China's economy is under relatively big downward pressure, and the government is struggling to meet the 7 percent growth target this year. So Zhou's comment sends a strong signal of more easing policies ahead," Kwok said.
China's stock market, which surged more than 50 percent last year on government easing hopes, is up another 16 percent this year, pushed up by herd investors who are snapping up newly launched mutual funds, often in days. Continuación...