China stocks rise on economic recovery hopes


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SHANGHAI — China stocks rose on Thursday as investor hopes for a strong economic recovery in 2023 dwarfed worries over COVID spike, with authorities vowing to support growth.

** China’s blue-chip CSI 300 Index was up 1.7% by the end of the morning session, and set to log its best day in one month, while the Shanghai Composite Index rose 0.9%.

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** Hong Kong’s Hang Seng Index gained 1%, and the Hang Seng China Enterprises Index rose 1.2%.

** Other Asian shares also advanced on investor hopes for China’s emergence from the pandemic, while the dollar stayed under pressure even as the U.S. Federal Reserve meeting minutes showed the Fed warning against market bets on interest rate cuts this year.

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** “China’s abrupt reopening from Covid restrictions has led to a public health mess … None of this will derail a robust economic recovery, aided by government policy that is now firmly focused on supporting growth,” Gavekal Dragonomics analysts said in a note.

** China’s central bank said on Wednesday it would keep liquidity reasonably ample, step up financing support to spur domestic consumption and key investment projects, and support a stable real estate market in 2023.

** Foreign investors had bought a net 11 billion yuan ($1.6 billion) of Chinese shares so far on Thursday, set to log the biggest amount since Dec. 1.

** Chinese shares in consumer staples, healthcare and New energy rose between 2% and 3% to lead the gains.

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** Tech giants listed in Hong Kong surged as much as 3.9% before ending up 1.1% by the lunch break.

** “A strengthening growth outlook should push the indexes higher. Sectors focused on domestic consumer demand should outperform more export-dependent tech hardware. The offshore components of MSCI China stand to benefit most, given attractive relative valuations and a more relaxed regulatory environment for internet platforms,” Gavekal Dragonomics analysts said.

** The strong performance comes even as a private-sector survey showed China’s services activity shrank in December as surging COVID infections hit demand. But the pace of recent declines slowed while business confidence rose to a 17-month high. (Reporting by Shanghai Newsroom Editing by Vinay Dwivedi)


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