January 17, 2019 / 4:38 AM / 9 months ago

China, HK shares inch higher as Premier Li Keqiang vows policy support

* Shanghai index rises 0.5 pct, Hang Seng 0.4 pct higher

* Chinese premier promises more spending as he warns of headwinds

* Shares rise after PBOC’s record injection to avert cash crunch

HONG KONG, Jan 17 (Reuters) - Chinese and Hong Kong stocks climbed on Thursday after China’s Premier Li Keqiang committed to increase government investment this year, amid mounting signs of slowing economic growth. ** At the midday break, the Shanghai Composite index was up 0.5 percent at 2,582.19 points. ** China’s blue-chip CSI300 index was up 0.4 percent, with its financial sector sub-index higher by 0.7 percent, the consumer staples sector up 0.3 percent, and the healthcare sub-index up 0.5 percent. ** Chinese H-shares listed in Hong Kong rose 0.5 percent, while the city’s main Hang Seng Index climbed 0.4 percent to 27,003.43, breaching the 27,000 points barrier for the first time since December 4, 2018. ** The smaller Shenzhen index was pretty much flat while the start-up board ChiNext Composite index edged down 0.2 percent. ** Li Keqiang, the Chinese premier, said on Wednesday that China will increase investment in public services and infrastructure, expand consumption, and keep economic growth within a reasonable range in 2019, as he warned of a difficult year ahead for the Chinese economy. ** “Shares are rising because of expectation of new policies supporting the economy, especially after the premier repeatedly expressed his support. But it will take time for the stimulus to be effective,” said Zhang Gang, a Shanghai-based analyst with China Central Securities. ** The People’s Bank of China injected a net $83 billion into the country’s financial system on Wednesday, a daily record, to avoid a cash crunch amid mounting worries over economic growth. ** The central bank made the move a day after money supply data showed several of China’s key credit gauges continue to languish around record lows, and after Germany, a key trade partner with China, reported its weaker-than-expected economic growth on Tuesday. ** “Against such a background, the leadership may take more policy measures to stimulate the economy, and the consumer sector will be the first to benefit from policy,” Wei Yi, an analyst at Kaiyuan Securities wrote in a note on Thursday. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.3 percent while, Japan’s Nikkei index was close to flat. ** The yuan was quoted at 6.7645 per U.S. dollar, 0.1 percent weaker than the previous close of 6.7580. ** The largest percentage gainers in the main Shanghai Composite index were Wintime Energy Co Ltd, up 10.3 percent, followed by Sichuan Hongda Co Ltd and Triumph Science & Technology Co Ltd, both up 10.1 percent. ** The largest percentage losses in the Shanghai index were shares of Sanan Optoelectronics Co Ltd, down 6.1 percent, followed by Shanghai No.1 Pharmacy Co Ltd, losing 5.9 percent and Delixi Xinjiang Transportation Co Ltd , down by 5.2 percent. ** As of 04:01 GMT, China’s A-shares were trading at a premium of 17.67 percent over the Hong Kong-listed H-shares. ** The Shanghai stock index is below its 200-day moving average. ** In Hong Kong, technology shares led the gains, rising 1.6 percent. ** “Stocks like autos have been boosted lately by policy announcements, and many of these tech stocks were left behind,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “I think investors are seeing short-term trading opportunities with as the wider market rises.”

Reporting by Noah Sin; Editing by Rashmi Aich

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