SHANGHAI: China blue-chip stocks staged their biggest jump in five months on Thursday on strong foreign inflows, with overseas investors snapping up big-cap Chinese companies as policy expectations and the market’s low valuation offered attractive opportunities.
The blue-chip CSI 300 Index closed up 2.3%, logging the biggest gain since July 25, and the Shanghai Composite Index added 1.4%.
Hong Kong’s Hang Seng Index surged 2.5%, and the Hang Seng China Enterprises Index climbed 2.9%.
The broad Asian shares scaled five-month peaks, as market wagers on ever-more aggressive rate cuts extended a huge rally in US stocks and bonds, while also leaving plenty of scope for disappointment in the new year.
Foreign investors bought a net 13.5 billion yuan ($1.90 billion) of Chinese stocks via the Stock Connect on the day, booking the biggest daily inflow in five months.
In mainland markets, new energy stocks jumped 6.5% to lead the gains, while shares in real estate developers, consumer staples and tourism firms rose between 2.8% and 3.8%.
“In the market, valuation and sentiment indicators are all at record low levels,” said Huajin Securities in a note, adding there is limited room for further decline.
The broker said markets expected possible rate cuts early next year, while recent data showing double-digit gains in China’s November industrial profits also helped sentiment.
China will strive to expand domestic demand, ensure a speedy economic recovery and promote stable growth, according to an interim report on China’s 14th five-year plan published by parliament on Wednesday.
Tech giants listed in Hong Kong gained 3.4%, with food delivery giant Meituan up 5.2%. The Hang Seng Mainland Properties Index advanced 4.7%.
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