China stocks close higher on US stimulus hopes

China stocks close higher on US stimulus hopes

China stocks settled higher on Thursday, in line with other Asian markets on hopes of more stimulus from U.S. President Joe Biden‘s administration to cushion the economic damage wreaked by the COVID-19 pandemic.

The blue-chip CSI300 index rose 1.6% to 5,564.97, while the Shanghai Composite Index added 1.1% to 3,621.26.

The tech-heavy start-up board ChiNext rallied 2.5%, while the STAR50 index firmed 0.1%.

Republicans in the U.S. Congress have indicated they are willing to work with the new president on his administration’s top priority, a $1.9 trillion fiscal stimulus plan, but some are opposed to the plan’s price tag.

Leading the gains, the CSI300 materials index and the CSI300 transport index advanced 2.6% and 3%, respectively.

For now, the A-share market continued to find support from a solid recovery in China’s economy and ample liquidity, Yuekai Securities said in a report.

Worries over the resurgence of COVID-19 cases kept gains in check.

China reported a rise in new COVID-19 cases despite a flurry of recent measures to contain the latest outbreak in the northeast, with Heilongjiang province recording its biggest daily increase in new patients to date.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.43%, while Japan’s Nikkei index closed up 0.82%.

At 0717 GMT, the yuan was quoted at 6.4614 per U.S. dollar, 0.02% firmer than the previous close of 6.463.

As of 0718 GMT, China’s A-shares were trading at a premium of 33.76% over the Hong Kong-listed H-shares.

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