Reuters | Mar 02, 2016 05:10
SHANGHAI (Reuters) - China stocks climbed more than 2 percent on Wednesday morning, aided by a surge in real estate and resources shares as investors welcomed signs of recovery in the property market while disregarding Moody's downgrade of its China outlook.
Hong Kong shares also rose sharply, led by energy plays (HSCIE), tracking gains in U.S. and European markets.
In an apparent effort to manage market expectations, the official Xinhua news agency said in a commentary that China's cut in banks' reserve requirement ratio (RRR) - which took effect on March 1 - is by no means a signal of any coming large-scale stimulus.
The commentary follows rising speculation China could implement a version of the massive stimulus it adopted during the 2008 global financial crisis. That package was later criticised for misallocating resources and delaying much-needed structural reforms.
"There was some confusion over the government's policy directions. Now, investors have much clearer expectations," said Zeng Yan, strategist at Zhongtai Securities Co.
"Recent signs of recovery in the property market provided some confidence that the economy could be stabilizing."
Meanwhile, Zeng brushed aside the impact from the China outlook downgrade by Moody's Investors Service, saying the move is an underestimation of Beijing's strength.
Moody's cut its outlook to "negative" from "stable", saying there was a weakening in the government's fiscal position and uncertainty about the authorities' capacity to implement reforms.
Stocks rose across the board on Wednesday, with an index tracking developers <.SSEP> surging 4.5 percent, amid media reports that the market for homes has become hot in China's first and second-tier cities following a slew of supportive measures.
Resources stocks <.CSI300MT> were up 3.3 percent.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.