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Chinese stocks and Hong Kong stocks posted strong gains after the Beijing administration announced its latest measures to address the real estate crisis.
The CSI 300 index was on its way to entering a technical bull market, while the prices of iron ore and shares of Chinese real estate development companies jumped after three major cities eased home purchase rules..
The gains in Chinese stocks came after data showed that China’s manufacturing purchasing managers’ index contracted to 49.8 in September. This is a better reading than the expected contraction of 49.4.
The data was reflected in stock trading, as the index jumped CSI300 By about 7.7% after rising 16% last week.
Chinese stocks received positive support over the past week thanks to Chinese stimulus, as the People’s Bank of China decided to reduce the main interest rate as well as the mandatory reserve rate, in addition to other measures to support the faltering real estate sector..
Stocks also rose in Hong Kong, as the Hang Seng Index achieved 3.5% gains, supported by the real estate sector, which rose 8.4%.%.
Matthew Haupt, portfolio manager at Wilson Asset Management, said: “This time, the Chinese government seems more serious about implementing economic stimulus measures, which gives some hope compared to previous attempts.” So, the recovery this time may be longer-term, and we will wait for further announcements to get a clearer view on the path of the Chinese economy and stock market.».
