February 26, 2020 / 5:07 AM / a month ago

China stocks firm as new coronavirus cases slow

SHANGHAI, Feb 26 (Reuters) - Chinese stocks recouped earlier losses to rise on Wednesday, as new coronavirus cases fell and investors expected further stimulus to support the world’s second-largest economy. ** Both Shanghai index and the blue-chip CSI300 index dropped more than 1% in early morning trade following Wall Street’s sharp losses on growing global virus fears. The indexes reversed course as real estate and industrial stocks lent support. ** The CSI300 index was unchanged at 4,124.73 points at the end of the morning session, while the Shanghai Composite Index gained 0.3% to 3,022.21 points.

** The correction in the U.S. equities could have limited impact on the A-share market, which may remain strong given foreign investors’ continued allocation to yuan assets and cheap valuations of the A-share market, said Luo Kun, an analyst with Fortune Securities. ** There are expectations Beijing will roll out more measures to bolster the economy, including support for the country’s real estate and infrastructure, he said. ** Chinese policymakers have implemented a raft of measures to support an economy jolted by a coronavirus outbreak that is expected to have a devastating impact on first-quarter growth. ** Leading the rebound, SSE property sub index rallied 3.6%, while SSE industrials sector gained 2.2% by midday break. ** Mainland China had 406 new confirmed cases of coronavirus infections on Tuesday, the country’s National Health Commission (NHC) said on Wednesday, down from 508 cases a day earlier. ** Outside Hubei, the number of new mainland China cases fell to 5, down for the fifth consecutive day and the lowest since Jan. 20, when the NHC began publishing nationwide figures. ** In Hong Kong, stocks also pared losses as the government unveiled measures to bolster the economy. ** Hong Kong unveiled measures worth HK$120 billion ($15 billion) in its annual budget on Wednesday to strengthen an economy grappling with the coronavirus outbreak and months of anti-government protests. ** Hong Kong’s economy is expected to expand at an average growth rate of 2.8% in real terms from 2021-2024, Financial Secretary Paul Chan said on Wednesday, as he announced his budget for the Asia financial hub. ** China’s CSI300 financial sector sub-index was higher by 0.77%, the consumer staples sector up 0.18%, the real estate index up 3.7% and the healthcare sub-index down 2.02%. ** Chinese H-shares listed in Hong Kong fell 0.38% to 10,540.12, while the Hang Seng Index was down 0.49% at 26,760.77. ** The smaller Shenzhen index was down 0.78% and the start-up board ChiNext Composite index was weaker by 2.26%. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.97% while Japan’s Nikkei index was down 1.12%. ** The yuan was quoted at 7.0191 per U.S. dollar, 0.09% weaker than the previous close of 7.013. ** The largest percentage gainers in the main Shanghai Composite index were Shanghai Shenhua Holdings Co Ltd, up 10.24%, followed by JiShi Media Co Ltd, gaining 10.14% and Everbright Jiabao Co Ltd, up by 10.11%. ** The biggest percentage decliners in the Shanghai index were Jiangsu Boxin Investing & Holdings Co Ltd, down 10%, followed by Beijing United Information Technology Co Ltd , losing 9% and Shanghai Wondertek Software Co Ltd , down by 8.7%. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Maju Samuel)

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