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Mercados

China stocks firm as Beijing pledges reforms, liquidity

* SSEC 0.0%, CSI300 0.5%, HSI -0.2%

* HK->Shanghai Connect daily quota used 4.6%, Shanghai->HK daily quota used 2.8%

* FTSE China A50 +0.5%

SHANGHAI, June 18 (Reuters) - China stocks firmed on Thursday as policymakers assured investors that the economy is gradually recovering from the coronavirus crisis, while pledging more reforms and liquidity to bolster capital markets.

** At the midday break, the Shanghai Composite index was up 0.03% at 2,936.88 points, while China’s blue-chip CSI300 index rose 0.46%.

** The smaller Shenzhen index was unchanged for the day and the start-up board ChiNext Composite index was weaker by 0.41%.

** China’s economic fundamentals remain sound and its financial markets are stable overall, the central bank governor said on Thursday, adding that the bank would keep liquidity levels reasonably ample in the second half of the year.

** New loans are likely to hit nearly 20 trillion yuan ($2.83 trillion) this year, up from a record 16.81 trillion yuan in 2019, and total social financing could increase by more than 30 trillion yuan, the governor said.

** Earlier in the day, the People’s Bank of China made its first 14-day reverse repo injection since February, and cut the rate 20bps.

** China’s top securities regulator said on Thursday that the country would continue to “comprehensively deepen” capital market reform, and that the top priority is to help market confidence recover amid the pandemic.

** The remark came after Beijing finalized over the weekend new IPO rules for Shenzhen’s ChiNext startup board, as it pushed forward with reforms in its capital markets.

** Concerns over a sudden jump in virus cases in Beijing eased somewhat as investors expected Beijing’s containment measures would soon bring it under control.

** The Chinese government has taken swift measures to handle the new cases in Beijing, said Zhou Longgang, an analyst with Huachuang Securities.

** China reported 28 fresh COVID-19 cases in the mainland as of end-June 17, 21 of which were in the capital of Beijing, the country’s health commission said on Thursday.

** Bucking the broad strength, Chinese banking shares slipped after government said it will push for them to surrender profits to help bolster the economy.

** Chinese H-shares listed in Hong Kong dipped 0.03% to 9,906.82, while the Hang Seng Index was down 0.22% at 24,427.54.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.19%, while Japan’s Nikkei index dropped 0.38%.

** The yuan was quoted at 7.0737 per U.S. dollar, 0.14% firmer than the previous close of 7.0835. (Reporting by Luoyan Liu and Andrew Galbraith, Editing by Sherry Jacob-Phillips)

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