China stocks log fourth weekly gain after central bank injected cash

China stocks log fourth weekly gain after central bank injected cash
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SHANGHAI (June 24): Chinese stocks closed up at their highest level since early March on Friday (June 24), gaining for a fourth straight week, as the country stepped up effort to stimulate a Covid-19-hit economy with the infusion of fresh capital into the banking system to keep liquidity stable.

The blue-chip CSI 300 Index rose 1.2% to 4,394.77, while the Shanghai Composite Index gained 0.9% to 3,349.75 points.

The Hang Seng Index rose 2.1% to 21,719.06, while the China Enterprises Index gained 2.2% to 7,629.06 points.

For the week, the CSI 300 Index rose nearly 2%, while the Hang Seng Index added 3.1%.

The People's Bank of China injected 60 billion yuan (US$8.96 billion or about RM39.45 billion) worth of seven-day reverse repos as demand for cash for the end of the first half of the year started to pick up. 

Global equity markets rose as commodities including copper and oil dropped, offering a salve for inflation fears. 

Refinitiv data showed strong inflows from foreign investors, totalling more than 13.1 billion yuan through the Stock Connect's Northbound leg.

Chinese battery giant CATL jumped nearly 5% as it will start mass production next year of its latest-generation product, with greater efficiency that lets electric cars drive longer distances on each charge.

New energy firms added 2.2%, while shares in defence and tourism went up more than 3% each.

Healthcare firms listed in mainland China gained 2.9%, while peers trading in Hong Kong surged nearly 7%.

"After a swift rebound led by the reopening theme and high-beta stocks/laggards recently, we expect the market to consolidate in the next two months on a mild economic recovery and earnings downgrades," said Meng Lei, a China equities strategist at UBS Securities, as the CSI 300 had risen roughly 15% since a trough in late April.

He added that the market pullback in the next two months would likely provide an attractive opportunity and a more material valuation rerating from late in the third quarter, when broad estimate cuts potentially come to an end.

Tech giants listed in Hong Kong were up 4.1%, with e-commerce giant Alibaba rising 5.5% amid hints that China's technology crackdown is abating.