Chinese stocks soared 4.8 percent to close higher across the board on Thursday after a top regulator assured investors that the country's market was healthy, sparking hopes of government policy support and technically driven buying after the market's recent slump. Hong Kong shares rose 1.2 percent, lagging the strong rally on the Shanghai bourse, with investors wary ahead of key monthly jobs data from the US that may reveal a slower recovery for the world's largest economy.
Chinese state newspapers splashed China Securities Regulatory Commission Vice Chairman Liu Xinhua's reassuring message across their pages on Thursday in an apparent effort to help talk up the market. The benchmark Shanghai Composite Index closed up 4.8 percent at 2,845.024 points, building strongly on moderate technical gains in the past two sessions, but analysts said they were still cautious over the near-term market trend.
All 890 Shanghai stocks traded on Thursday were gainers, while turnover for Shanghai A shares jumped to, but was still moderate at 138 billion yuan ($20 billion), from Wednesday's thin 88 billion yuan, which was the lowest level in nearly six months.
Chinese traders warned that a one-day rally did not mean much for the market's short- or medium-term trends. Many Chinese investors still consider the index to have technically entered bear market territory after it closed below the closely watched 125-day moving average, now at 2,768 points, for a third day.
Weighing on sentiment, a government researcher said in remarks published on Thursday that China's banking regulator was refusing to allow banks with a capital adequacy ratio below 9 percent to start new lines of business or open new branches. Ba Shusong was quoted by the China Securities Journal as saying that Beijing's stimulative policies were having a positive impact but the authorities had to be wary of the risks posed by rapid lending.
But his comments did not have much impact on trading due to an overwhelmingly optimistic outlook for the day, with top lender Industrial and Commercial Bank of China jumping 4.17 percent to close at 4.75 yuan.
The benchmark Hang Seng Index finished 239.68 points higher at 19,761.68 but turnover stayed slim at HK$57.8 billion compared with Wednesday's HK$53.3 billion, its lowest level in one and half months. Top insurer China Life rose 2.8 percent tracking gains on the Shanghai index while smaller rival Ping An Insurance rose 3.1 percent. The China Enterprises Index, which represents top locally listed mainland Chinese stocks, was up 2.1 percent at 11,429.21.
Gold miner Zijin Mining vaulted 8.5 percent to HK$6.88 after the price of the precious metal shot up overnight on its safe haven appeal. Shandong Gold soared its 10 percent daily limit to 51.69 yuan. Economic pessimism and a weak US dollar spurred gold to its highest level since June on Wednesday.
Other metal stocks also advanced with Aluminium Corp of China, better known as Chalco, gaining 4.4 percent while Jiangxi Copper jumped 5.9 percent after Shanghai copper rose 3 percent. Top steel counter Baoshan Iron and Steel rose 7.07 percent to 7.12 in Shanghai after the China Securities Journal, citing analysts, said the sector was certain to move into the black in the third quarter of this year after a loss-making first half.
Shares of Macau casino operators rose sharply on Thursday on reports that gambling revenues in Macau rose to a record high in August, signalling a faster-than-expected recovery in the world's largest gambling market. Galaxy Entertainment Group climbed 7.7 percent to a close at HK$2.50, a level last seen in May this year, while Melco International Development gained 9.7 percent.
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