China shares gain for fourth day on market reforms, Sino-U.S. tensions curb gains
China stocks ended higher for the fourth straight session on Wednesday, buoyed by Beijing’s capital market reforms, though gains were checked by ongoing Sino-U.S. tensions.
** At the close, the Shanghai Composite index was up 0.37% at 3,333.16, while the blue-chip CSI300 index ended 0.5% higher after rising 2.1% earlier in the session.
** Both indexes recovered most of their losses from a trough hit last week due to worries over policy tightening and foreign outflows.
** China revamped its Shanghai share index on Wednesday for the first time in 30 years, adding STAR Market-listed tech companies, kicking out high-risk companies and delaying inclusion of newly-listed stocks. An index tracking the STAR Board will be published after market close.
** China’s stock market is now expected to step into a new stage and it’s likely a slow bull run would kick off, as the new index could better reflect the country’s economic growth and bolster investor confidence, Hu Shaohua, an analyst with Donghai Securities, said in a report.
** Leading the gains, the tech-heavy start-up board index rose 1.2%.
** Tech firms remain strategic bets for investors in the long run, as Beijing pushes forward with more reforms to support its tech sector, said Liu Hongming, fund manager at Beijing-based Dingxin Huijin Asset Management Company.
** Beijing’s push for tech self-sufficiency becomes more pressing amid the persistent Sino-U.S. tensions which saw the U.S. impose restrictions on China’s tech firms.
** U.S. Secretary of State Mike Pompeo said on Tuesday the United States wants to build a global coalition to counter China as he accused Beijing of exploiting the coronavirus pandemic to further its own interests.
** The U.S. Commerce Department added to an economic blacklist on Monday 11 Chinese companies it said were implicated in human rights violations regarding China’s treatment of Uighurs in the western Xinjiang region.
Source: Reuters (Reporting by Luoyan Liu and Andrew Galbraith)