China stocks rose on Friday, helping the blue-chip index have its best week since November and close at its highest in 17 months thanks to solid data, a slowing in the pace of new listings and a central bank move to ease liquidity worries. Stocks were also supported by expectations that index publisher MSCI will decide to include Chinese A shares in its benchmark index on June 20.
On Friday, The blue-chip CSI300 index rose 0.4 percent, to 3,576.17 points, while the Shanghai Composite Index added 0.3 percent to 3,158.40 points. For the week, the CSI300 advanced 2.6 percent – its best week since the one ending Nov. 25, 2016. The SSEC gained 1.7 percent this week, its best weekly advance since April.
The securities regulator last weekend approved fewer initial public offerings, easing worries over the pace of expansion for equity supply. The People’s Bank of China on Wednesday injected 180 billion yuan ($26.48 billion) into the interbank market via open market operations, after providing capital support via one-year Medium-term Lending Facility (MLF) loans in the previous session.
Boosting sentiment, China on Thursday reported stronger-than-anticipated exports and imports for May despite falling commodity prices, partly offsetting data on Friday showing the country’s producer price inflation eased for the third straight month in May.
For the week, blue-chips far outperformed, with investors in particular chasing large-cap industry-leading companies with lower valuations and good fundamentals amid soured appetite for small-caps. “In a slowing economy, investors are buying big caps for their earnings quality, visibility and cash flow,” Hong Hao, head of research at BOCOM International, wrote in a report on Friday.