SHANGHAI: Chinese shares closed at five-week highs on Tuesday, led by a rally in stocks of consumer and high-tech firms, as the market witnessed its highest foreign inflows for this year ahead of Shanghai’s imminent reopening and easing of COVID-19 curbs.

The blue-chip CSI300 index rose 1.6% to 4,091.52, its highest closing level since April 19, while the Shanghai Composite Index gained 1.2% to 3,186.43.

China stocks close up as COVID curbs ease

** Refinitiv data showed foreign inflows of 19.7 billion yuan ($2.96 billion) into A-shares through Stock Connect, marking the largest amount this year.

** The city of Shanghai is set to ease curbs at midnight for residents of low-risk areas, marking an end to a two-month lockdown for most of the city.

** But the economic drag of lockdowns is unlikely to be lifted quickly, with public areas required to cap people flows and residents subject to close monitoring and regular testing.

** “Shanghai’s phased-in reopening may only represent a respite rather than a turning point,” economists at Nomura said in a note.

** “The real turning point will be marked by a shift in China’s stance on its zero COVID strategy rather than headline COVID caseloads, the easing of some lockdowns or monthly activity data.”

** An official Chinese manufacturing survey showed activity contracted more slowly in May as coronavirus curbs were relaxed, but ongoing controls on movement continue to dim the growth outlook.

** China’s cabinet unveiled a package of 33 measures, which was announced last week, covering fiscal, financial, investment and industrial policies, to revive the pandemic-ravaged economy.

** Consumer staples climbed 2.8%, information technology jumped 3.3%, while semiconductors and new energy shares added more than 2% each.