SHANGHAI (REUTERS) – China stocks firmed on Wednesday (Oct 18), with the blue-chip index closing at a 26-month high, as investors pinned hopes on a key leadership summit in Beijing, promoting reforms to boost growth in the world’s second-largest economy.
The twice-a-decade Communist Party congress is expected to cement the power of President Xi Jinping, who kicked off the week-long event with a speech in which he said the market would be allowed to play a decisive role in allocating resources.
Xi also said China would deepen economic and financial reforms and further open its markets to foreign investors as it looked to move from high-speed to high-quality growth.
The blue-chip CSI300 index rose 0.8 per cent, to 3,944.16 points, its highest close since August 2015, while the Shanghai Composite Index added 0.3 per cent to 3,381.79 points.
Investors are keen for direction on economic and financial market reform over the next five years, though China’s leadership events in the past have been light on detail.
“Market participants are paying much more attention to the party congress this time, as they are watching if any surprise reforms will emerge amid concerns over economic growth,” said Yan Kaiwen, an analyst in Shanghai with China Fortune Securities.
Yan said China’s ongoing supply-side ones have boosted economic growth, which should give investors confidence about the success of future reforms.
Also lifting sentiment, China’s central bank injected 300 billion yuan (S$61 billion) into money markets on Wednesday, as Beijing moved to maintain market liquidity.
Defensive consumer and healthcare firms led the advance while financials and utilities held steady. Material firms, however, extended losses, falling 0.8 per cent, amid continued weakness in commodities market.