SHANGHAI: China stocks closed higher for a second straight session on Tuesday, as a top regulatory official downplayed the impact of the trade war with the United States, and as foreign investors bought shares ahead of an increase in MSCI’s weighting.
The blue-chip CSI 300 index rose 1.0 per cent, to 3,672.26, while the Shanghai Composite Index closed up 0.6 per cent at 2,909.91.
The trade war with the United States has had limited impact on China’s financial markets and its effects will be “even smaller” in the future, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said in an interview with state television broadcast on Monday.
If Sino-US trade tensions deteriorate further, there is a possibility of marginal easing in China’s fiscal and monetary policies, as Beijing could take counter-cyclical measures to fully hedge the negative impact and stabilise market expectations, China Galaxy Securities said in report.
Besides, Beijing is further opening up its financial markets despite the trade war, which market participants expect could bring in more long-term foreign money to prop up its stock market.
Foreign investors bought more than 7 billion yuan ($1.01 billion) worth of A-shares via the Stock Connect linking Hong Kong and the mainland, reversing an eight-session selling streak through Monday.
The first phase of MSCI’s weighting increase of Chinese mainland shares will take effect after market hours on Tuesday.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.16 per cent, while Japan’s Nikkei index closed up 0.37 per cent.
At 07:14 GMT, the yuan was quoted at 6.9078 per US dollar, 0.15 per cent weaker than the previous close of 6.8974.
The largest percentage gainers on the main Shanghai Composite index were Gansu Dunhuang Seed Group Co Ltd , up 10.1 per cent, followed by Anhui Liuguo Chemical Co Ltd , gaining 10.1 per cent, and Suzhou New District Hi-Tech Industrial Co Ltd, up by 10.07 per cent.
The largest percentage losers on the Shanghai index were Qingdao Topscomm Communication Inc, down 6.51 per cent, followed by Kangmei Pharmaceutical Co Ltd, losing 5.06 per cent, and Guizhou Changzheng Tiancheng Holding Co Ltd , down by 5.03 per cent.
So far this year, the Shanghai stock index is up 16.7 per cent and the CSI 300 has risen 22 per cent, while China’s H-share index listed in Hong Kong is up 2.7 per cent. Shanghai stocks have declined 5.47 per cent this month.
About 22.33 billion shares were traded on the Shanghai exchange, roughly 83.0 per cent of the market’s 30-day moving average of 26.89 billion shares a day. The volume in the previous trading session was 19.67 billion.
As of 07:15 GMT, China’s A-shares were trading at a premium of 27.13 per cent over the Hong Kong-listed H-shares.