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China shares rebound on rise in lending

China shares rebound on rise in lending

Chinese shares rebounded Wednesday as investor confidence was buoyed by evidence that Beijing's massive stimulus package is beginning to boost economic activity.
The benchmark Shanghai Composite Index rose 3.5 percent, or 65.5 points, to close at 1928.87. The Shenzhen Composite Index for China's smaller second exchange market, jumped 3.9 percent to 594.02.
The central bank reported Wednesday that new bank lending rose sharply in December as the government began to implement a $586 billion economic stimulus plan. The plan is meant to reduce China's reliance on exports by boosting domestic consumption through spending on highway construction and other projects.
"We could see the first round of loans for the government investment were taking place. Plus, ample liquidity is a necessity for the stock market," said Mao Nan, an analyst for Oriental Securities in Shanghai.
Bank stocks rose after the Royal Bank of Scotland sold its stake in state-owned Bank of China Ltd. in Hong Kong for nearly $2.4 billion. Analysts said investors took that as a sign to start bargain-hunting.
Bank of China rose 2.4 percent to 2.99 yuan. Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, added 2.6 percent to 3.57 yuan. Midsize institution Pudong Development Bank Ltd. soared 8.1 percent to 15.10 yuan.
China Pacific Insurance Group, China's third-largest insurer, surged the daily maximum of 10 percent to 13.74 yuan, while Ping An insurance Ltd., advanced 8.2 percent to 29.85 yuan.
Citic Securities Ltd., the brokerage unit of China's biggest investment company, soared 9.2 percent to 20.14 yuan, while Haitong Securities Ltd. rose by the daily limit of 10 percent to 9.82 yuan.
Shanghai property shares rose further on lingering enthusiasm about Disney Corp.'s announcement last week that it would build a theme park there. Wai Gaoqiao Free Trade Zone Development Ltd. surged by the daily limit of 10 percent to 12.73 yuan, while Shanghai Jinqiao Export Processing Zone Development Co. advanced 7.9 percent to 10.13 yuan.
In currency markets, China's yuan strengthened to 6.8350 to the U.S. dollar, up from Tuesday's close of 6.83603.


Updated : 2021-04-13 02:04 GMT+08:00