China, HK stocks gain on Beijing's support to tech, auto

China, HK stocks gain on Beijing's support to tech, auto
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(June 23): Chinese stocks rose to a near four-month closing high on Thursday (June 23), while Hong Kong's share benchmark gained over 1%, as Chinese tech companies and automakers jumped on Beijing's policy support.

The market also drew inspiration from a surge in Chinese battery giant Contemporary Amperex Technology Co Ltd (CATL), following its US$6.7 billion (about RM29.52 billion) private placement and China's planned introduction of new stock index derivatives.

US and European central banks "have been raising interest rates and shrinking balance sheets, but China has been loosening monetary policies to stabilise growth", said Linus Yip, the chief strategist at First Shanghai Group.

In addition, "valuations of China and Hong Kong stocks are lower than their US peers".

China's blue-chip index of CSI 300 rose 1.7% to the highest closing level since early March. The Shanghai Composite Index climbed 1.6%, also hitting a near four-month closing high.

Hong Kong's Hang Seng Index rose 1.3%.

Tech shares in both markets rose sharply after Chinese President Xi Jinping signalled support to the country's leading payment and fintech firms in the latest indication that Beijing is easing its regulatory crackdown on the sector.

Xi chaired a top-level meeting on Wednesday that approved a plan for the healthy development of China's large payment firms and the fintech sector, state media reported. 

The Hang Seng Tech Index rose 2.3% as index heavyweight Alibaba Group Holding Ltd jumped 6.4%.

Meanwhile, shares in Chinese automakers jumped 6% after China's Cabinet vowed on Wednesday to step up support to automobile purchases. 

An index tracking new energy vehicle companies gained 3.8% as EV battery maker CATL surged nearly 6% after completing a share placement that counted Macquarie Bank, JPMorgan Chase Bank and Barclays Bank as investors.

China's small-cap CSI1000 Index rose 2.3% on news that the country plans to roll out stock index futures and options based on the gauge.