Mainland stocks firm on business optimism

Source:Reuters-Global Times Published: 2017/9/20 18:08:40

Chinese mainland stocks edged higher on Wednesday, bolstered by strong gains in consumer stocks and new-energy car manufacturers, with sentiment propped up by improving business confidence and expectations that the country will maintain stability in financial markets ahead of a key Party congress.

The blue-chip CSI300 index rose 0.27 percent to 3,842.44 points, while the Shanghai Composite Index also gained 0.27 percent to 3,366.00 points.

Both indexes have been trading narrowly over the past three weeks.

UBS Securities published a survey suggesting Chinese business leaders overall hold a positive outlook for the next six months, with the majority of firms planning to increase capital expenditure over the next year.

"We believe higher optimism expressed by large firms is in part due to ongoing capacity cuts and production curbs as well as stronger environmental protection, which tends to benefit large companies in the impacted industries," UBS strategist Gao Ting wrote.

Material firms and consumer stocks led the gains as investors expect they would benefit from the week-long National Day holidays that start October 1.

Real estate shares were subdued, amid signs the Chinese government is stepping up curbs on home price rises. The People's Bank of China said late on Tuesday it supports a move by some banks to increase lending rates on mortgage loans in the Beijing market.

"Green" car manufacturers and players in the supply chain extended their surge in a frenzy for new-energy vehicles.

Chinese automaker BYD Co, backed by US investor Warren Buffett, shot up 7.98 percent on Wednesday. The shares have gained 24.10 percent since talk began of a ban on petroleum powered cars.

Posted in: MARKETS

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