July 1, 2020 / 4:46 AM / 8 days ago

China shares rally as rate cuts, factory data boost recovery hope

BEIJING/SHANGHAI, July 1(Reuters) - China shares rallied on Wednesday, as the central bank’s move on rate cuts and the country’s improved June factory data continued to fuel hopes for a quicker economic recovery. ** At the midday break, the Shanghai Composite index was up 0.91% at 3,011.77, breaching the key 3,000-point level for the first time since March 6. ** China’s blue-chip CSI300 index was up 1.48%, with its financial sector sub-index rising 1.68%, the consumer staples sector up 3.74%, while the real estate index gaining 6.25%. ** Hong Kong markets are closed on Wednesday for a public holiday. ** The smaller Shenzhen index was up 0.82% and the start-up board ChiNext Composite index was weaker by 0.35%. ** China’s central bank said on Tuesday it would cut the re-discount and re-lending rates by 25 basis points as of July 1, in a move to reduce funding costs for smaller firms and rural sectors. ** China’s factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures and ramped up support steps, a survey showed on Wednesday. ** The gradual economic recovery will be the main theme in the second half of 2020, according to China Securities, which is likely to boost shares driven by the consumption pick-up. ** Shares of China’s biggest liquor makers hit record highs, with Kweichow Moutai Co Ltd rising 2.5% in the morning session to hit an all-time high. ** Shares in Chinese developers also gained on recovery hopes, with the CSI300 real estate index rallying 6.25%, marking its best session since Feb. 14. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.33% while Japan’s Nikkei index was down 0.44%. ** The yuan was quoted at 7.064 per U.S. dollar, 0.01% firmer than the previous close of 7.065. (Reporting by Cheng Leng in Beijing, Luoyan Liu and Andrew Galbraith in Shanghai; Editing by Rashmi Aich)

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