China shares end higher on better-than-expected retail data, hopes for policy support

Reuters2021-07-15

* SSEC +1.02%, CSI300 +1.35%

* Banks, EVs lead gains;

* China's Q2 GDP growth misses expectation

SHANGHAI, July 15 (Reuters) - China stocks closed higher on Thursday with banks and the electric vehicle sector leading gains, as investors cheered a better-than-expected retail sales in June while hoping for continued policy support to an economic recovery.

** At the close, the Shanghai Composite index was up 1.02% at 3,564.59 and the blue-chip CSI300 index was up 1.35%. Both indexes made the biggest daily gain since June 25.

** Leading the gains, the banking sector sub-index surged 2.56%, while the new-energy vehicle sector gained 2.09%.

** EV battery supplier Ganfeng Lithium rose 5.05%, while Jiangsu Zhangjiagang Rural Commercial Bank added 5.3%.

** The consumer staples sector was up 1.81%, the real estate index rose 1.04%, and the healthcare sub-index up 0.71%.

** The smaller Shenzhen index ended up 0.35% and the start-up board ChiNext Composite index was higher by 1.398%.

** China's economy grew less than expected in the second quarter, as slowing manufacturing activity, higher raw material costs and new COVID-19 outbreaks weighed on the recovery momentum. But year-on-year June retail sales growth was better than expected.

** "Our greater concern is the uneven recovery that we've seen so far, and for China the recovery in domestic consumption is very important... retail sales this month was fairly strong and that may allay some concerns," said UOB economist Woei Chen Ho in Singapore.

** Investors are watching the central bank for a shift to an easier policy stance after the People's Bank of China cut the amount of cash that banks must hold as reserves with effect from Thursday.

** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.79%, while Japan's Nikkei index closed down 1.15%.

** At 07:19, the yuan was quoted at 6.4596 per U.S. dollar, 0.15% firmer than the previous close of 6.469.

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