HONG KONG: China and Hong Kong shares edged up on Thursday to join a broader rally in Asia, with sentiment buoyed by state media reports of potential easing measures from Beijing in coming weeks.

China stocks end lower as investors await more stimulus

• At the midday break, the Shanghai Composite index was up 0.21% at 3,233.92 points.

• The blue-chip CSI300 index was up 0.02%, with its financial sector sub-index higher by 0.41%.

• In Hong Kong, the benchmark Hang Seng Index was up 0.83% at 19,445.68.

• Sentiment was largely upbeat across Asia as traders raised bets on potential rate cuts by the Federal Reserve this year following an easing core US inflation.

• Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.19% while Japan’s Nikkei index was up 0.28%.

• Investors are also anticipating more easing measures from Beijing after state media reported that China’s central bank may cut banks’ reserve requirement ratio (RRR) before the Spring Festival at the end of this month.

• As room for interest rate cuts is curtailed by the yuan depreciation pressure, an RRR cut could send a clearer signal to ease the policy void until March, and is a straightforward instrument to offer permanent liquidity, analysts at Bank of America said in a note to clients.

• Limiting gains on Thursday, chip stocks declined 0.5%, with AI firm Cambricon Technologies tumbling over 11% after the US escalated its tech curbs and added more Chinese entities to a US restricted trade list.

• The property sector also weakened as developer China Vanke faced renewed scrutiny over its debt repayment capabilities amid a challenging property market.

• Two of its yuan bonds plummeted over 20% on Thursday, leading to trading suspensions.