ALBAWABA – China’s CSI 300 Index rose 1.6 percent Thursday, raising expectations for more stimulus out of Beijing, especially in light of weak economic data reports, Bloomberg reported.
Overseas investors net bought $1.3 billion of mainland shares through trading links with Hong Kong, according to Bloomberg-compiled data.
That’s the biggest net purchase since early February.
Bloomberg’s experts are predicting rate cuts that would lower borrowing costs.
A State Council meeting is expected on Friday to introduce a bundle of new fiscal stimulus. So far, top officials have recently held at least six consultations with business leaders and economists on revitalising the economy, according to Bloomberg.
Macquarie Group Ltd. expects a 10-basis-point reduction in the one-year rate and a 15 basis point decline in the five-year, the New York-based news agency said.
Foreign buying boosted local stocks and the yuan outperformed many regional peers after the People’s Bank of China cut the interest rate on one-year loans, Bloomberg underscored.
“The focus will be if the Chinese authorities deliver, and whether what is delivered surpass expectations or not,” Redmond Wong of Saxo Capital Markets HK Ltd told the news agency.
“Investors have become impatient with incremental measures and want a more expansive and aggressive package in one go.”
The key, though, is that investors and companies want a comprehensive package rather than piecemeal measures, Bloomberg explained.
“China has to announce more policies to aid the economy,” said Steven Leung, executive director at UOB Kay Hian in Hong Kong.
