The Chinese stock market closed higher on Friday after Premier Li Keqiang vowed strong measures to boost slowing economic growth. At the close, the Shanghai Composite index was up 1 percent at 3,021.75, while the blue-chip CSI300 index was up 1.3 percent. The Shanghai index rose 1.7 percent this week, while the CSI300 gained 2.4 percent.
SI300's financial sector sub-index was higher by 1.2 percent, the consumer staples sector was up 1.3 percent, and healthcare shares rose 1 percent. The smaller Shenzhen index ended up 1.4 percent and the start-up board ChiNext Composite index was higher by 0.8 percent.
China will not let economic growth slip out of a reasonable range amid downward pressure on its economy, Li said on Friday at a press conference marking the end of the annual meeting of the National People's Congress.
The Chinese premier pledged strong measures to support growth, saying that the government could use tools such as reserve requirements and interest rates. Li added that China would cut value-added tax (VAT) for manufacturing and other sectors on April 1 and social security fees from May 1. The measures are coming after China lowered its growth target to 6 to 6.5 percent for 2019, down from around 6.5 percent last year.
But signs of economic stress kept the stock market's gains in check. Li's remarks came after China reported its slowest monthly industrial output growth in 17 years, and jobless rates rose month-on-month. The market expects prudent measures to support growth, not a benchmark interest rate cut, said Zhang Qi, an analyst with Haitong Securities in Shanghai.
"We've just been through a few tough years of deleveraging. I don't think there will be full-on loosening," he said. But the market could ride on fresh support if the Sino-US trade talks produce a positive outcome, Yannan Chenye, head of China equity research at Harvest Global Investments, said in a note. "Any market correction would be a good opportunity to accumulate China shares," said the analyst.
Chinese Vice Premier Liu He spoke by telephone with US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer, making further substantive progress on trade talks, Xinhua news agency said on Friday. Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.7 percent, while Japan's Nikkei index closed up 0.8 percent. So far this year, the Shanghai stock index is up 21.2 percent and the CSI300 has risen 24.4 percent.
About 34.12 billion shares were traded on the Shanghai exchange. The volume in the previous trading session was 37.31 billion. The Shanghai stock index is above its 50-day moving average and above its 200-day moving average.
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