China stocks jump on cocktail of recovery signals

HONG KONG, April 15 () - Chinese shares rallied on Monday on a confluence of upsides - stronger lending at home, improved exports data, and signs of the Sino-U.S. trade talks entering a final stage.

** At the midday break, the Shanghai Composite index was up 1.1 percent at 3,224.45 points, while the blue-chip CSI300 index gained 1.2 percent. Both indexes were up over 2 percent at one point during the session.

** CSI300's financial sector sub-index was higher by 1.8 percent, the consumer staples sector was up 0.8 percent, the real estate index climbed 0.8 percent and energy stocks gained 0.6 percent.

** China's new bank loans rebounded in March, rising far more than analysts anticipated, as policymakers pushed lenders to support struggling smaller companies and boost sluggish economic growth. That took the total bank lending in the first three months of 2019 to a record quarterly tally of 5.81 trillion yuan ($866.22 billion).

** Chinese 10-year Treasury futures for June delivery , the most-traded contract, fell as much as 0.68 percent in early trade on Monday, after the improved credit data boosted risk appetite.

** "It seems the national economy may bottom out and rebound earlier (than expected). Since the market is not short of cash, and liquidity is improving, this has given A-shares a reason to rebound further," analysts at Kaiyuan Securities, who see the Shanghai Composite Index reaching 3,500 points in the first-half of 2019, wrote in a note on Monday.

** Jefferies' analysts favour blue-chips as lending improves. "The bottom line is that the stars remain aligned for the CSI 300 with sentiment, earnings revision and monetary conditions all reversing. We remain modestly bullish on CSI 300 within our global asset allocation," they said in a memo on Monday.

** China's exports rebounded and posted the strongest growth in five months, customs data showed on Friday. The rise was partly due to seasonal factors, said analysts. Imports shrank for a fourth straight month and at a sharper pace.

** Two sources briefed on discussions on Sino-U.S. trade talks told that Washington tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing, marking a retreat on a core U.S. objective for the negotiations.

** U.S. Treasury Secretary Steven Mnuchin said on Saturday he is hopeful Beijing and Washington are "getting close to the final round of concluding issues," and that the two sides will continue the talks via phone this week.

** In Hong Kong, the Hang Seng Index hit 30,280.12 points in morning trade, a level not seen since the United States slapped tariffs on China in mid-June 2018. The benchmark stood at 30,084.73 points at midday, up 0.6 percent. H-shares gained 0.9 percent.

** Around the region, MSCI'sAsia ex-Japan stock index was firmer by 0.4 percent, while Japan's Nikkei index was up 1.4 percent.

** As of midday, China's A-shares were trading at a premium of 25.57 percent over the Hong Kong-listed H-shares.

($1 = 6.7073 Chinese yuan)

China stock market graphics suite

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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