SHANGHAI, Nov 7 (Reuters) - China’s blue-chips index extended its rise on Tuesday to close at a two-year high, aided by robust gains in banking and energy firms, and also drawing strength from the investor confidence that pushed Wall Street to another record overnight.
The blue-chip CSI300 index rose 0.9 percent, to 4,054.25 points, the highest level since August 2015, while the Shanghai Composite Index closed up 0.7 percent to 3,413.57 points.
Despite growing concern that China’s economic growth is likely to slow, some brokerages have started to paint a glowing picture for its A-share market in 2018.
In its annual strategy report, investment bank China International Capital Corp (CICC) forecast a “double-digit” rise for China’s A-share index by the end of next year.
“Sustained economic growth, and a drop in systemic risks would make China a hotbed for long-term investment in 2018,” wrote CICC strategist Wang Hanfeng, adding that he expects a further rise in blue-chip shares.
Sector performance was mixed on Tuesday.
Ping An Bank leapt 5.7 percent to a 28-month high, leading the gains in banking sector.
Resources firms also made handsome gains, with an index tracking energy shares up 1.9 percent on higher oil prices triggered by political uncertainty stemming from the corruption crackdown in key producer Saudi Arabia.
But defensive consumer and healthcare firms weakened, as investors pocketed gains after the recent bull run.
Many eyes were also on the return of Qihoo 360, China’s leading anti-virus software maker, to Shanghai.
Shares in elevator maker SJEC Corp, the backdoor listing vehicle of Qihoo 360, surged the maximum 10 percent allowed to a six-month high as trading resumed on Tuesday following a five-month halt. (Reporting by Luoyan Liu and John Ruwitch; Editing by Sam Holmes)