China stocks rise on policy support

China shares rose on Wednesday, led by gains in manufacturers and suppliers of electric vehicles, as investors were assured that policymakers would avoid sudden policy tightening in 2021 to support an economic recovery from the pandemic-induced slump.

** By the midday break, the Shanghai Composite index was up 0.85% at 3,385.35, while China’s blue-chip CSI300 index was up 0.99%. ** The tech-heavy start-up board ChiNext Composite index was higher by 1.53% and Shanghai’s tech-focused STAR50 index was up 0.66%. ** Leading the gains, the new energy vehicle sub-index and the CSI300 industrials index rose 3.17% and 2.13%, respectively.

** Qingdao TGOOD Electric Co Ltd, an EV charging pole maker, soared 13.8% to touch its highest in nearly five years, while BAIC Bluepark New Energy Technology Co Ltd , the EV making unit of state-owned BAIC Automotive Group, hit the highest level since January 2016. ** Chinese H-shares listed in Hong Kong rose 0.71% to 10,457.99, while the Hang Seng Index was up 0.44% at 26,235.27. The smaller Shenzhen index was up 0.87%.

** China’s central bank will scale back support for the economy in 2021 and cool credit growth, but fears of derailing a recovery from a pandemic-induced slump and debt defaults are likely to prevent it from tightening any time soon, policy sources said.

** China’s state planner said it would launch a nationwide inspection on the repayment risks for enterprise bonds that mature in the near term and in 2021. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.05%, while Japan’s Nikkei index was up 0.35%. ** The yuan was quoted at 6.5508 per U.S. dollar, 0.12% weaker than the previous close of 6.5429.

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