December 27, 2018 / 4:40 AM / 6 months ago

China, HK stocks rise on economic policy support hopes

* SSEC, CSI300, HSI up 0.6 pct each

* Government expected to hold up growth after New Year

* Analysts see regulators supporting key levels in stock market

HONG KONG, Dec 27 (Reuters) - The stock markets in China and Hong Kong climbed on Thursday as investors anticipated more government support to shore up economic growth, and by extention lift share prices in 2019. ** The Shanghai Composite index and the blue-chip CSI300 index both edged up 0.6 percent, with the Shanghai index standing at 2512.35 points. ** Gains were recorded across the board. CSI 300’s financial sector sub-index was higher by 0.8 percent, the consumer staples sector was up 1.2 percent, the real estate index gained almost 1 percent and the healthcare sub-index moved up 0.3 percent. ** The smaller Shenzhen index and the start-up board ChiNext Composite index both gained 0.5 percent. ** In Hong Kong, the main Hang Seng Index rose 0.6 percent, while the index for Chinese companies listed in the city climbed 0.7 percent. ** The Financial Stability and Development Committee, a top policy body, announced its intention to allow commercial banks to issue perpetual bonds on Wednesday, according to a statement carried by the country’s central bank. ** As policy support takes shape and authorities loosen credit supply, “total social financing will steadily rebound starting from the first quarter of 2019, supporting economic growth, which is beneficial for the stock market,” analysts at Tianfeng Securities wrote in a note on Thursday. ** The analysts recommend shares of securities companies against this backdrop. “We are at the beginning of policy loosening. We believe the financing cost for securities companies will fall,” they wrote. The sub index tracking the sector rose 1.1 per cent in the morning session. ** However, the sentiment remains fickle and confidence is lacking in the Chinese market, Zhao Wei, an analyst at Founder Securities, another local brokerage, wrote on Monday. But the risk of pledged shares, which prompted authorities to intervene in October, will give the market some support at key levels. **”If the market falls, a financial crisis could be triggered, if the market rises, that will resolve the financial risk,” said Zhao. That is “the most important connotation of efforts to save the market since October 19, and the reason why the main (Shanghai Composite) index rebounded near 2,449 points.” ** Outside China, Asian markets were lifted by an overnight rally on Wall Street, thanks to more upbeat U.S. data and higher oil prices. **Around the region, MSCI’s Asia ex-Japan stock index was firmer by almost 1 percent, while Japan’s Nikkei index jumped close to 4 percent. ** The oil rally sent energy companies in Hong Kong higher. Hang Sang’s sub index for the sector finished the morning session 2.4 per cent higher. ** The largest percentage gainers in the main Shanghai Composite index were shares of Wintime Energy Co Ltd, up 10.2 percent, followed by Lanzhou LS Heavy Equipment Co Ltd , up 10.1 percent, and Zhe Jiang Dong Ri Ltd Co , which gained 10 percent.

Reporting by Noah Sin; Editing by Rashmi Aich

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