SHANGHAI, June 19 China stocks rose on Monday,
with the blue-chip CSI300 index snapping a three-day losing
streak, on signs that tight liquidity is easing and as fewer new
listings are expected to come onto the market.
The blue-chip CSI300 index rose 1.0 percent, to
3,553.67 points, while the Shanghai Composite Index
added 0.7 percent to 3,144.37 points.
Traders said liquidity conditions improved as the central
bank continued to provide funds via open market operations,
after injecting a net 410 billion yuan into money markets last
week, the biggest weekly injection since mid-January.
Still, authorities appear to have paused their campaign in
recent weeks, possibly due to concerns over liquidity or perhaps
an indication that they are assessing earlier policy steps to
see if they are starting to slow the real economy, as many
"Liquidity conditions have eased as the government has
recently decreased its focus on tightening financial
regulations," UBS Securities wrote in a report.
Expectations of fewer new listings also supported Chinese
stocks on Monday, particularly small-caps whose valuations had
been pressured by worries of more equity supply.
The securities regulator approved six initial public
offerings (IPOs) on Friday, which was the fourth straight week
that the pace had slowed from an average of around 10 IPOs in
the past months.
Chinese investors are also awaiting a decision by U.S. index
provider MSCI, which will decide on June 20 whether to include A
shares in its Emerging Market Index.
The stock regulator said it would be happy for MSCI index
inclusion, but Chinese capital market reform will not be
derailed without the inclusion.
"The inclusion could bring about 60.7 billion yuan into the
(A-share) market, but the impact would be limited if the
inclusion does not happen," Haitong Securities wrote.
Most sectors gained ground, led by financial and
Real estate stocks gained 0.7 percent, after
data showed China's month-on-month home price growth remained
robust in May, rising 0.7 percent nationwide despite a string of
cooling measures across the country.
Still, monthly price rises largely stalled in the country's
biggest cities such as Beijing and Shanghai.
($1 = 6.8132 Chinese yuan)
(Reporting by Luoyan Liu and John Ruwitch; Editing by