China stocks end higher on optimism over Beijing’s pledge to support recovery

China stocks end higher on optimism over Beijing's pledge to support recovery

BEIJING/SHANGHAI: China shares ended higher on Wednesday, buoyed by optimism that policymakers would likely avoid sudden credit policy tightening in 2021 to support an economic recovery from the pandemic-induced slump. ** At the close, the Shanghai Composite index was up 0.76 per cent at 3,382.32, while the blue-chip CSI300 index was up 0.85 per cent. The smaller Shenzhen index ended up 0.74 per cent.

The start-up board ChiNext Composite index was higher by 1.11 per cent while Shanghai’s tech-focused STAR50 index was up 1.32 per cent.

Leading the gains, the new energy vehicle sub-index and the CSI300 industrials index rose 2.1 per cent and 2.3 per cent, respectively.

China’s central bank will scale back support for the economy in 2021 and cool credit growth, but fears of derailing a recovery from a pandemic-induced slump and debt defaults are likely to prevent it from tightening any time soon, policy sources said.

China’s state planner said it would launch a nationwide inspection on the repayment risks for enterprise bonds that mature in the near term and in 2021.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.05 per cent, while Japan’s Nikkei index closed up 0.33 per cent.

At 07:20 GMT, the yuan was quoted at 6.537 per US dollar, 0.09 per cent firmer than the previous close of 6.5429.

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