November 25, 2016 / 7:22 AM / 2 years ago

Blue-chips lead China stocks to best week in six months

SHANGHAI, Nov 25 (Reuters) - China’s leading share index capped its best week in nearly 6 months on Friday as investors continued to scoop up blue-chips on signs that the economy is on steadier footing.

The CSI300 index rose for a fifth straight day, advancing 0.9 percent to 3,521.30 points, its highest in nearly 11 months.

Also reflecting growing investor confidence, the Shanghai Composite Index shook off a near 1 percent drop in morning trade and ended up 0.6 percent at 3,261.94 points.

For the week, the CSI300 rose 3 percent, while the SSEC gained 2.2 percent, its best week since mid-November.

With the economy showing signs of stabilization, and even some recovery in certain sectors, a growing number of brokerages are starting to turn optimistic, predicting further market gains.

Analysts say China’s stock market is becoming increasingly attractive to yield-seeking investors, such as insurers, amid the backdrop of growing curbs on the housing market, a fragile bond market and high volatility in the futures market.

Such optimism has emboldened stock punters to boost their leveraged bets.

Outstanding margin financing - money investors borrow to buy stocks - jumped to over 956 billion yuan ($138.27 billion) this week, up 50 billion yuan from end-October, and the highest level since December, 2015.

Most sectors gained ground, led by properties and banks.

$1 = 6.9138 Chinese yuan renminbi Reporting by Luoyan Liu and John Ruwitch; Editing by Kim Coghill

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