- Government aims to start Shenzhen-H.K. equity link this year
- Focus on whether state funds will continue buying after NPC
China’s stocks rose for a fourth day, led by financial and energy companies, after Premier Li Keqiang said at the close of annual policy meetings that the government will employ “innovative measures” to keep economic growth on track.
The Shanghai Composite Index added 0.2 percent at the close. Industrial & Commercial Bank of China Ltd. and PetroChina Co., long considered targets of government buying because of their large index weightings, advanced at least 1.3 percent. Ping An Insurance Group Co. climbed for a fourth day after reporting higher net income.
While a sluggish global economy weighed on the nation’s prospects, China will find new drivers if growth drops out of its normal range, Li said. The end of the National People’s Congress has thrown the spotlight on whether the government will continue to prop up the stock market. The Shanghai Composite has risen 6.8 percent this month amid suspected buying by state-backed funds in some of the nation’s biggest companies during the NPC.
“There is no spectacular surprise in Li’s comments and the market will remain in a consolidation phase in the next few sessions,” said Ronald Wan, chief executive at Partners Capital International in Hong Kong.
The Shanghai gauge climbed to 2,870.43. The Shenzhen Composite Index lost 1 percent. The Hang Seng China Enterprises Index retreated 0.4 percent at the close in Hong Kong, while the Hang Seng Index lost 0.2 percent.
Ping An rose 2.5 percent in Shanghai after its net income increased 38 percent in 2015, helping lift a gauge of financial companies by 1.6 percent. ICBC, the largest lender, advanced 1.4 percent. PetroChina climbed for a third day, adding 1.3 percent. Crude prices increased after U.S. industry data showed the pace of growth in stockpiles slowed amid a glut.
A measure of consumer-staple shares fell 1 percent. Kweichow Moutai Co., the biggest maker of baijiu liquor, slumped 1.4 percent.
Li said on Wednesday the nation can cut back bloated industries without mass layoffs or derailing the nation’s growth trajectory, although the economic performance is diverging across provinces as challenges rise and sluggish global growth weighs on prospects. The premier is striving to restructure China’s economy away from a over-reliance on investment and cheap exports after growth slumped to a 25-year low last year.
The government “will try our best” to start a stock-trading link between Shenzhen and Hong Kong this year. China’s cross-border equity-link program is seen as a milestone in the nation’s effort to reform its financial markets and boost use of the yuan. MSCI Inc. has said that giving foreigners greater access to Shenzhen is key to including the nation’s stocks in global benchmark indexes.