China stocks rise for fourth straight week

SHANGHAI: China stocks rose on Friday, logging a fourth consecutive week of gains, while Hong Kong shares tracked global peers higher on expectations of rate cuts by global central banks.

China’s blue-chip CSI300 Index ended up 0.4% while the Shanghai Composite Index gained 0.6%.

Hong Kong’s benchmark Hang Seng added 0.8%.

The broad Asian stock market rose to a seven-month peak, tracking global peers as investors cheered the prospect of an imminent rate easing cycle, led by major central banks.

China’s 5% economic growth target for 2024, announced this week, is ambitious and can be achieved if backed by further stimulus measures in monetary, fiscal and regulatory policy, analysts said.

Chinese stocks have been aided by suspected state-backed buying via blue-chip funds this week as China holds its key annual parliamentary meeting, but analysts warn of volatility ahead.

“Market likely to remain volatile as NPC (National People’s Congress) fiscal package is insufficient to break the deflation concern and corporate earnings remain challenged,” Morgan Stanley analysts said in a note.

The bank also cautioned against premature excitement over the securities regulator’s comments, as the biggest hurdle for the equity market to recover meaningfully remains on the macro and economic policy fronts.

Wu Qing, head of China’s securities regulator, vowed to protect small investors by cracking down on market misbehaviour and improving the quality of listed companies.

Data on Thursday showed China’s export and import growth in the January-February period beat forecasts, though that did little to turn around battered sentiment.

Shares in communications equipment jumped 5% to lead the gains, while semiconductors and photovoltaics both climbed. Tourism companies lost 1.4%.

Three US Senate Democrats from auto manufacturing states urged the Biden administration to hike import tariffs on Chinese electric vehicles to address national security risks. New energy vehicles shares was roughly flat.

Tech giants listed in Hong Kong rose 0.8%.