China stocks inch up, consumer and healthcare firms lend support

Business Monday 23/October/2017 12:12 PM
By: Times News Service
China stocks inch up, consumer and healthcare firms lend support

Shanghai: China stocks ended slightly higher on Monday on strong gains in consumer and healthcare firms though trading volumes remained thin as investors awaited policy cues from a key party congress.
Policymakers at the Communist Party congress in Beijing suggested that Beijing was formulating plans for a free port in Shanghai and accelerating the construction of the Xiong'an special economic zone, which triggered buying in stocks that could benefit from the two projects.
The blue-chip CSI300 index rose 0.1 per cent, to 3,930.80 points, while the Shanghai Composite Index also added 0.1 per cent to 3,380.70 points.
Investors are turning cautious amid signs that China's economic recovery may be losing steam and as they await quarterly earnings from a slew of companies this week that could serve as a barometer of the country's economic health.
Chen Xiaopeng, strategist at Sealand Securities, expected the market to face correction pressure in the fourth quarter "as liquidity conditions could tighten due to external environment."
Sector performance was mixed on Monday.
Real estate stocks remained weak, as fresh data showed growth in new home prices in China slowed to a crawl in September.
China's housing minister said property sales would likely slow in the fourth quarter but prices are expected to remain stable, reiterating the government's position that "houses are for living in, not for speculation".
The banking sector fell 0.9 per cent, as Ping An Bank Co kicked off the earnings season for the sector. Investors expect the sector to suffer from tougher financial regulations.
The defensive consumer and healthcare firms outperformed the broader market.
An index tracking major healthcare firms climbed 1.1 per cent to its highest since mid-2015, led by Baiyunshan Pharmaceutical scaling a 21-month high, after the firm posted solid net profit growth.
Investors are also pushing the environmental protection subindex higher, as policymakers hinted at the party congress that fighting pollution was one of the government's major tasks.