SHANGHAI, June 8 China stocks extended gains on
Thursday, with the blue-chip CSI300 index settling at a fresh
six-month high, buoyed by stronger-than-expected foreign
exchange and trade data.
Chinese markets were also supported by signs of improved
liquidity in the financial system and growing expectations that
index publisher MSCI will decide to include Chinese A shares in
its benchmark on June 20.
The blue-chip CSI300 index rose 0.8 percent to
3,560.98 points, while the Shanghai Composite Index
added 0.3 percent to 3,150.33.
Data on Wednesday showed China's foreign exchange reserves
rose more than expected in May to a seven-month high as tougher
capital restrictions and a weak dollar reduced pressure from
Analysts expect forex reserves to increase further as the
yuan has sharply rebounded against the U.S. dollar in recent
weeks after the central bank declared war on speculators.
Further boosting sentiment, China reported
stronger-than-anticipated exports and imports for May despite
falling commodity prices, suggesting the economy is holding up
better than expected despite rising lending rates and a cooling
Most economists, however, still share the view that the
economy will gradually lose momentum in coming months as
property cooling measures and higher financing costs drag on
investment and business activity.
Brokerage Lianchu Securities also attributed the market
rebound to signs that "the central bank has intentionally moved
to stabilise market expectations," by injecting more liquidity
into the banking system.
Most sectors advanced.
Gains were led by the defensive healthcare and
consumer stocks, whose index closed at a record high
since its launch in 2005, as investors favoured blue-chips with
lower valuations and good fundamentals.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Kim