China stocks end higher after Fed signals dovish view

Reuters2021-03-18

SHANGHAI, March 18 (Reuters) - China stocks rose on Thursday, driven by gains in consumer and healthcare firms, after the U.S. Federal Reserve pledged to maintain an accommodative monetary policy and projected a rapid jump in U.S. economic growth this year.

The blue-chip CSI300 index rose 0.8%, to 5,141.77, while the Shanghai Composite Index gained 0.5% to 3,463.07.

Leading the gains, the CSI300 consumer staples index added 2%, while the CSI300 healthcare index closed 2.3% higher.

Both sub-indexes posted their third straight day of gains.

Sentiment picked up after the U.S. Fed tamed inflation fears that had hurt growth-oriented stocks with high valuations.

The U.S. economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policymakers are pledging to keep their foot on the gas despite an expected surge of inflation.

Liquidity tightening is almost certain to happen as the economy recovers, leading to an inescapable correction in equities, Guosen Securities noted in a report, referring to the recent sharp fall in the A-share market.

But it's still too early to call an end to the bull run, the brokerage added.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 1.04%, while Japan's Nikkei index closed up 1.01%.

At 07:11 GMT, the yuan was quoted at 6.4933 per U.S. dollar, 0.18% firmer than the previous close of 6.5052.

As of 07:12 GMT, China's A-shares were trading at a premium of 33.44% over the Hong Kong-listed H-shares.

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