Investing.com-- Chinese benchmark stock indexes surged to their highest levels in 2024 on Thursday after the government loosened more restrictions on the beleaguered property market, while some positive trade data also aided sentiment.
The bluechip Shanghai Shenzhen CSI 300 index rose 1% to a seven-month high, while the Shanghai Composite index rose 0.9% to its highest level since early-September.
Gains in mainland stocks pushed Hong Kong’s Hang Seng index up 1.3%, with property stocks leading gains across all three indexes.
Optimism over the property market helped Chinese stocks extend a strong run-up seen over the past three months, as a mix of bargain buying and improved economic prospects drove strong gains in local markets.
Reuters reported that key Chinese tier-2 city Hangzhou had lifted all home purchase restrictions, following similar moves in Shanghai and Beijing seen earlier this year. Several other major Chinese cities had also lifted such restrictions earlier in 2024.
The looser restrictions come as China moves to shore up demand in the severely battered property market which, despite a three-year downturn, still accounts for a quarter of the overall economy.
Weakness in the property market was also a key weight on Chinese economic growth through 2023, especially as more developers faced defaults.
Optimism over the looser restriction saw Chinese markets rise even as beleaguered property developer Country Garden Holdings Company Ltd (HK:2007)said it will be unable to make interest payments on a key yuan bond, slipping further into default. Country Garden is among the several high-profile casualties of China’s property slump, along with China Evergrande Group (HK:3333).
Sentiment towards China was also supported by some positive trade data. Chinese imports grew substantially more than expected in April, ramping up hopes that domestic consumption and demand was improving amid better overall economic growth.
