WRAPUP 1-China stocks, yuan jump in heavy trade on stimulus hopes
By Samuel Shen and Pete Sweeney
SHANGHAI Oct 12 (Reuters) - Chinese investors jumped back into stocks on Monday in heavy volume trade that pushed prices to seven-week highs, boosted by hopes for more economic stimulus after the central bank expanded a scheme that increases banks' ability to lend.
The yuan rose to its highest levels since its surprise devaluation on Aug. 11 sent shock waves through global markets, with investors fearing the worst for an economy that for years has been the growth engine of the world.
The mood on Monday was a far cry from June, July and August when Chinese stocks appeared to be in freefall and authorities were scrambling to put a floor under markets with an unprecedented flurry of rescue measures.
Hopes for more economic stimulus measures from Chinese authorities prompted buyers back into the market.
China is due to announce a five-year plan for the economy later this month and over the weekend the central bank increased a pilot scheme on bank lending to several major centres, including Beijing and Shanghai.
The scheme allows banks to refinance high quality credit assets.
"The policy may not immediately inject a lot of liquidity into the economy, but it has boosted expectations of monetary easing," said Wu Kan, head of equity trading at Shanghai-based investment firm Shanshan Finance.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen stock markets rose 3.2 percent, while the Shanghai Composite Index gained 3.3 percent. Continuación...