© Reuters
Investing.com– China’s domestic share markets rose on Monday as trade resumed after the Lunar New Year holiday, amid signals that consumer spending had picked up and in some cases surpassed pre-COVID levels during the week-long break.
The blue-chip index rose 0.5% to a 1-½ month high, while the index rose 0.9%.
Sentiment was aided chiefly by official data over the weekend showing that Chinese consumers spent more on travel, shopping and eating out during the week-long holiday than they had a year ago. Travel demand also surpassed pre-COVID levels.
The readings pushed up hopes that Chinese consumer spending- which is a key driver of economic growth- was now recovering after a three-year slump.
But gains in Chinese markets were held back by concerns that the Lunar New Year was only a flash in the pan, and that the underlying economy was still grappling with sluggish growth. Local indexes were still close to multi-year lows after falling sharply through 2023, as a post-COVID economic recovery in China largely failed to materialize.
Gains in Chinese stocks on Monday were much lower than those seen in offshore shares last week, particularly in Hong Kong. Hong Kong’s index also slid 1%, with mainland stocks relinquishing a bulk of gains seen last week.
Economic indicators for January- released in the days leading up to the holiday, had all shown weak business activity and a persistent deflationary trend. An ongoing property market crisis, rising youth unemployment and weakening demand for Chinese exports battered the Chinese economy over the past year.
This has led to investors calling for more, definitive signs of policy support from the government. But Beijing has so far remained largely conservative in rolling out more economic support.
The People’s Bank of China kept a medium-term lending facility unchanged over the weekend, and as such, is now widely expected to keep its benchmark unchanged this Tuesday.
