Hong Kong: China stocks recovered from the longest losing streak since October after benchmark money-market rates plunged and speculation rose that the government will take measures to strengthen the economy.
The Shanghai Composite Index rose 1% to 3,159.49 at 9:35am, halting a five-day, 7.5% slide that dragged down its relative-strength index to the lowest level in three months. Stocks have fallen this year amid concern the world’s second-biggest economy is weakening after Monday’s data showed manufacturing contracting in January.
Financial and energy companies led gains, with Yanzhou Coal Mining Co. and China Life Insurance Co. surging more than 3%. PetroChina Co. climbed for the first time in six days, while Haitong Securities Co. advanced 2.4%.
The People’s Bank of China injected 90 billion yuan ($14.4 billion) into the money markets to avoid a cash crunch amid new share offerings and ahead of Chinese New Year holidays.
“The rally could be on expectations of some policy easing after the weak PMI number,” said Audrey Goh, Singapore-based investment strategist at Standard Chartered Plc. “I won’t be surprised to see more easing measures.
” The CSI 300 Index advanced 1.1%, Hong Kong’s Hang Seng China Enterprises Index climbed 0.3% and the Hang Seng Index added 0.2%. The Bloomberg China-US Equity Index, the measure of the most-traded US-listed Chinese companies, rebounded 1.7% in New York.
