BEIJING: China shares rose Friday as continued bargain hunting for large caps pushed up Shanghai, while Australia fell, tracking losses in the U.S.
The Shanghai Composite Index jumped 2.2% to 4287.66 and the Hang Seng Index rose 0.3% to 27833.15.
The Shanghai index is headed for a more than 6% gain this week as local investors change strategy from mainly buying smaller stocks this year. Shenzhen’s ChiNext Price Index, which features small caps and startups, is in line for a 2.5% loss this week.
As of Thursday, the Shanghai Composite had gained 30% this year, while the ChiNext’s was up 68%.
Hong Kong’s Hang Seng Index is on track for a 2.4% gain this week after rising nearly 8% last week as mainland investors bought stocks. Vincent Chan, equity strategy at Credit Suisse, said investors in Hong Kong remain excited about the potential for mainland investment flows.
Credit Suisse estimates that mainland mutual funds could gradually invest up to 184 billion yuan ($29.8 billion) in Hong Kong once they are set up to use a trading link to access the market via Shanghai. The allocation would be equivalent to roughly equivalent to two days of the city’s market turnover. Analysts say it will take a few months before mainland mutual funds can trade through the Shanghai Hong Kong Stock Connect.
