Chinese stocks completed their biggest weekly gain this year as liquidity injections by the central bank and a stronger yuan helped stem the worst equity rout among global markets.
The Shanghai Composite Index rose 1 percent this week, the most since the period ended Dec. 25. It slid 0.6 percent to 2,763.49 at the close. Offshore Oil Engineering Co. paced gains among energy companies, while Shandong Gold Mining Co. led advances for materials stocks. The Hang Seng Chinese Enterprises Index added 0.8 percent, paring this week’s loss to 2.5 percent.
The People’s Bank of China injected 330 billion yuan ($ 50 billion) into the banking system this week, adding to January’s injection of 2 trillion yuan as policy makers eased a cash shortage before the weeklong lunar new year holidays starting on Feb. 8. The yuan in Hong Kong is set for its fourth weekly gain, the longest streak since October 2014. China relaxed restrictions on foreign funds as policy makers seek an entry to MSCI Inc.’s global stock indexes and bolster the nation’s financial markets after record capital outflows.
The CSI 300 Index fell 0.7 percent, paring this week’s gain to 0.6 percent, while Hong Kong’s Hang Seng Index rose 0.4 percent, trimming this week’s loss to 2.1 percent. Trading volumes in Shanghai were 28 percent below the 30-day average before the holiday. Mainland markets will resume trading on Feb. 15.
Source : Bloomberg