China stocks up as investor optimism offsets bank weakness
By Samuel Shen and Kazunori Takada
SHANGHAI, April 29 (Reuters) - China stocks recouped early losses and ended higher on Wednesday, with a surge in resources stocks and start-up companies offseting losses in banking shares amid signs of sustained investor enthusiasm.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.7 percent to 4,774.33 points, while the Shanghai Composite Index ended mringally higher at 4,476.62 points.
A survey by global asset manager Franklin Templeton Investment found a significant positive shift in Chinese investor sentiment and a move toward more aggressive investment strategies.
Chinese investors believe the country's equities and fixed income offer the world's best short- and long-term investment opportunities, but their appetite for U.S. stocks has slumped, according to the survey.
China's stock market has almost doubled during the past year, but "this round of bull run is not yet over," said Liu Yang, fund manager at Bosera Asset Management Co.
The government has launched reforms in the state sector, and kicked off its "One Belt, One Road" initiative, which will involve tens of billions of dollars in infrastructure projects extending from China to Europe and Africa.
Such a grand strategy "needs support from the capital markets," he said, adding further policy loosening would add fuel to the market's rise.
Resource shares jumped after the government said that from May 1 it would change the way it levies a resource tax for rare earth, tungsten and molybdenum, potentially benefiting the sector.
But China's banking sub-index fell 0.8 percent following weak bank results showing more evidence of a cooling economy and foreshadowing soft earnings announcements by other major lenders later on Wednesday.
Bank of Communications Co , the fifth-biggest lender, reported a sharp fall in first-quarter net interest margin late on Tuesday, while Agricultural Bank of China Ltd (AgBank) , the third-largest, posted its slowest quarterly profit growth in six years and rising bad loans. (Editing by Kim Coghill)
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