(Bloomberg) — Chinese stocks gained as investors drew comfort from signs that the twin Covid outbreaks in Shanghai and Beijing are stabilizing, and as policy makers stepped up efforts to bolster the economy.
The CSI 300 Index ended 0.7% higher on Thursday after climbing as much as 1.2% earlier. A sub-gauge of energy shares rallied 6% to be the best performer among sector indexes, boosted by solid earnings from China Shenhua Energy Co.
Covid cases in Shanghai fell for a fifth day on Wednesday to the lowest in more than three weeks. In Beijing, just 50 cases were reported yesterday, signaling mass-testing isn’t detecting a broader outbreak. Traders have repeatedly said that China’s strict Covid-Zero stance — which has cast a pall on the economy — is a key concern for equity markets.
“With Covid cases appearing to be under control in Beijing and Shanghai, investors could feel that lockdown policies might not stay for too long considering the need to also ensure economic growth,” said Castor Pang, head of research at Core Pacific-Yamaichi International.
China pledged to promote the growth of internet platform firms and give cash handouts to poor people who have lost their jobs, according to a statement issued after a Wednesday meeting of the State Council, China’s cabinet, which was chaired by Premier Li Keqiang.
READ: China Pledges Aid for Unemployed, Growth of Internet Firms (1)
“From Wednesday’s State Council meeting, investors could feel that the central government is trying all it can to support economic growth and the employment level,” said Pang.
In Hong Kong, the benchmark Hang Seng Index climbed 1.7% while the Hang Seng Tech Index rose 2.2%.
The CSI 300 jumped 2.9% on Wednesday, the most since March 16, after President Xi Jinping made a bold commitment to boost infrastructure spending in a bid to revive the economy.
READ: Xi’s Pledge Boosts Hopes Among Jaded China Stock Traders
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