Stocks rise after State Council meeting

Huang Yixuan
Shares continued to close higher on Thursday after Chinese Premier Li Keqiang acknowledges increasing growth headwinds and reiterates policy priority of stabilization
Huang Yixuan

China stocks continued to close higher on Thursday after a State Council meeting on Wednesday implied increased easing measures.

The Shanghai Composite Index extended rises by 0.96 percent to 2,985.86 points. The smaller Shenzhen Component Index increased 0.86 percent to 9,783.5 points, while the blue chip CSI300 index ended 1.01 percent higher at 3,925.32 points.

Turnover on the two major bourses added up to 797.5 billion yuan (US$111.62 billion), compared with the previous session's 605.83 billion yuan.

Chinese Premier Li Keqiang hosted a State Council meeting on September 4 during which he acknowledged increasing growth headwinds domestically and externally, and reiterated the policy priority to stabilize employment, finance, foreign trade, foreign investment, investment and market expectations (collectively known as the "Six Stabilities").

Nomura read the briefing of the State Council meeting as a signal that a reserve requirement ratio cut is on the cards, which could bolster market sentiment.

Meanwhile, China and the United States agreed to hold high-level trade talks in early October in Washington, China’s Ministry of Commerce said on Thursday.

In addition, JP Morgan announced late on Wednesday that it will add liquid Chinese government bonds (CGBs) to its widely tracked emerging market local currency bond index. Inclusion will be phased in over a 10-month period, starting from February 28, 2020.

Mark Leung, CEO of JP Morgan China, said that "the inclusion represents an important milestone as China continues to liberalize its capital markets and looks to connect more global investors to the country."

Stocks of over 60 companies listed on the A-share markets surged by the daily limit of 10 percent, of which 13 were in the computer sector.

Non-bank financial shares led the gains as well, with five companies posting increases hitting the daily cap.

Communication shares extended robust gains, with stocks of seven A-share listed firms rising by the maximum 10 percent.

On the new STAR Market, 21 out of 28 listed companies posted rises, among which ArcSoft Corporation climbed 4.21 percent while Beijing Worldia Diamond Tools Co ended 3.55 percent higher.

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