HONG KONG: China stocks ended mixed on Monday following two weeks of decline, lifted by banks and energy shares as dividend plays gained favour amid falling bond yields. Hong Kong’s Hang Seng index closed 0.8% higher.
At the close, China’s blue-chip CSI300 index was up 0.2%, while the Shanghai Composite index finished down 0.5% at 3,351.26, giving up earlier gains.
The bank sector sub-index rallied 1.7% and the energy sector jumped 0.7%, leading onshore gains.
Industrial And Commercial Bank Of China jumped 2.6% to a fresh record high since 2018, while Bank of China added 1.9%.
“Market speculation around policies has largely come to an end with all the important meetings in December wrapped up,” analysts at Citic Securities said in a note on Monday.
Banking stocks remain a preferred sector for renminbi asset allocators with high dividends and low volatility, and are expected to see increased allocation by insurance funds towards the year-end, they added.
Meanwhile, yields on China’s long-dated government bonds, including the 10-year, hit fresh record lows on Monday, which also fueled demand for high-dividend stocks.
The CSI 300 index had registered two weeks of losses amid the lack of stronger stimulus from Beijing and still-patchy economic data.
Still, the gauge has rallied over 15% so far in 2024, and is set to end an unprecedented three successive years of annual falls under the influence of COVID-19 restrictions, a long-running property crisis and deflation pressures.
The Chinese H-share index listed in Hong Kong, the Hang Seng China Enterprises Index, rose 1%.
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