June 20, 2019 / 8:14 AM / 6 months ago

China stocks hit 8-week closing high on dovish Fed stance

* SSEC 2.4%, CSI300 3.0%, HSI 1.2%

* HK->Shanghai Connect daily quota used 4.1%, Shanghai->HK daily quota used 2.8%

* FTSE China A50 +3.4%

SHANGHAI, June 20 (Reuters) - China stocks extended their rally on Thursday to end at an eight-week high as investors hoped for signs of thaw in Sino-U.S. trade dispute and policy easing after the Federal Reserve signalled possible interest rate cuts later this year.

** The rally in stocks comes as a host of central banks in Asia and Europe are scheduled to hold policy meetings later in the day, with most expected to flag moves toward looser monetary settings.

** Expectations of a worldwide wave of central banks’ stimulus also helped bolster sentiment after the U.S. Fed signalled more policy stimulus is needed to boost growth.

** The blue-chip CSI300 index ended up 3% at 3,828.52 points, while the Shanghai Composite Index closed 2.4% firmer at 2,987.12 points. Both indexes closed at their highest level since April 30.

** Aiming to jumpstart dormant talks, the top U.S. trade negotiator said he will confer with his Chinese counterpart before next week’s meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Japan as the two countries take another shot at resolving their damaging trade dispute.

** Upcoming trade talks between China and the United States are unlikely to immediately resolve major disagreements between the two sides, but could start a new phase in negotiations, Chinese state media said on Thursday.

** The U.S. Federal Reserve on Wednesday signalled interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took stock of rising trade tensions and growing concerns about weak inflation.

** Foreign inflows also helped boost stocks on the mainland, with investors via the Stock Connect linking mainland and Hong Kong buying nearly 6 billion yuan ($875.90 million) worth of A-shares by lunch break.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.22%, while Japan’s Nikkei index closed 0.6% higher.

** At 0749 GMT, the yuan was quoted at 6.8515 per U.S. dollar, 0.75% firmer than the previous close of 6.9033.

** So far this year, the Shanghai stock index is up 19.8% and the CSI300 rose 27.2%, while China’s H-share index listed in Hong Kong is up 7.9%. Shanghai stocks climbed 3.05% this month.

** About 29.10 billion shares were traded on the Shanghai exchange, roughly 139.1% of the market’s 30-day moving average of 20.92 billion shares a day. The volume in the previous trading session was 23.08 billion.

** As of 0750 GMT, China’s A-shares were trading at a premium of 27.42% over the Hong Kong-listed H-shares. ($1 = 6.8501 Chinese yuan) (Reporting by Shanghai Newsroom, Editing by Sherry Jacob-Phillips)

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