April 29, 2019 / 7:59 AM / 5 months ago

China's blue-chips firm on upbeat industrial profit data

* SSEC -0.8 pct, CSI300 0.3 pct

* China’s industrial profit picks up in March with a 13.9 pct rise

* As trade talks reach endgame, US-China ties could hinge on enforcement

SHANGHAI, April 29 (Reuters) - China’s blue-chip stocks on Monday retreated from steep losses in the previous week, as foreign investors looked for bargains after upbeat industrial profit data showed signs of recovery in the world’s second-largest economy.

** The blue-chip CSI300 index rose 0.3 percent, to 3,900.33 points, while the Shanghai Composite Index closed down 0.7 percent to 3,062.50 points.

** Both indexes on Friday posted their worst weekly drop in 28 on policy support worries.

** Profit at China’s industrial firms grew in March, rebounding from four months of contraction, adding to optimism the world’s second-largest economy may be starting to stabilise.

** China’s factory activity likely expanded at a steady but modest clip in April, marking the second straight month of improving business conditions, as government growth-boosting measures buoy the vast manufacturing sector.

** That the PBOC could temper the pace of its policy easing amid dovish stance of other global central banks, means it does not resort to flood-like stimulus and China’s economic performance is relatively better, Haitong Securities said in report.

** From a medium- to long-term perspective, there are no signs of a bubble in the overall valuations of A-shares market, and extensive medium- and long-term money will continue to flow into the A-shares market as China’s economy gradually bottoms out, Wanlian Securities wrote in note.

** It is hard for China’s monetary policy to take a sharp turn, as the downward pressure remains for the country’s economic growth, the brokerage added.

** All eyes were on the development of the Sino-U.S. trade negotiations.

** U.S. negotiators head to China on Tuesday to try to hammer out details to end the two countries’ trade war, including the shape of an enforcement mechanism, the success or failure of which could set the trajectory of ties for years to come.

** Gains were led by blue-chips, with the Shanghai SE50 index, an index tracking the 50 largest companies listed in Shanghai, ending up 1.6 percent, as investors cheered solid earnings at those sector leaders.

** There were also signs of bargain hunting, as investors on Monday via the Stock Connect programme linking mainland and Hong Kong bought a total of about 5 billion yuan of A-shares, according to Refinitiv data.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.55 percent.

** At 07:14 GMT, the yuan quoted at 6.7288 per U.S. dollar, 0.02 percent firmer than the previous close of 6.73.

** So far this year, the Shanghai stock index has risen 22.8 percent and the CSI300 gained 29.6 percent, while China’s H-share index listed in Hong Kong is up 14.9 percent. Shanghai stocks have declined 0.91 percent this month.

** As of 07:15 GMT, China’s A-shares were trading at a premium of 24.76 percent over the Hong Kong-listed H-shares. (Reporting by Shanghai Newsroom)

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