China stocks end higher ahead of expected Fed rate hike

Business Tuesday 13/June/2017 11:59 AM
By: Times News Service
China stocks end higher ahead of expected Fed rate hike

Shanghai: Strong gains in small-capitalisation shares led China stocks higher on Tuesday, but trading was thin as investors remained cautious ahead of a likely US interest rate hike this week.
The blue-chip CSI300 index rose 0.2 per cent, to 3,582.27 points, while the Shanghai Composite Index gained 0.4 per cent to 3,153.74 points.
Small-caps bounced. Shenzhen's start-up board ChiNext advanced 1.1 per cent after dropping 1.2 per cent on Monday.
But investors were wary as many expect liquidity to tighten.
"There's not much upside potential, as tighter liquidity will likely seep into the real economy, pressuring growth," said Liu Sijia, strategist at Donghai Securities in Shanghai.
A small majority of traders in the financial markets think China's central bank will likely raise short-term interest rates this week if the U.S. Federal Reserve raises its key policy rate, as widely expected, a Reuters poll found.
Although the size of any China rate move — likely confined to rates on open market operations — is expected to be modest, a tightening could exacerbate economic growth concerns.
Sectors performance was mixed. Gains were led by material stocks, while financial plays took a breather.