China stocks inched up on Thursday, helped by strong gains in resource firms on expectations of robust mid-year earnings. The blue-chip CSI300 index was unchanged at 3,660.10, while the Shanghai Composite Index added 0.2 percent to 3,212.44 points. China’s central bank skipped open market operations for the 10th day in a row on Thursday, citing “relatively high” liquidity levels in the banking system.
“The draining recently indicates that the central bank will not send any signals of loosening, in order to maintain relatively balanced liquidity conditions,” Li Lifeng, an analyst with Sinolink Securities, wrote in a note. The defensive consumer and health care sectors lost 0.7 percent and 1.1 percent respectively, paring strong gains made after their inclusion in a key MSCI index.
While some doubt the strong trend in blue chips will continue, many analysts see little risk of a major downturn in stocks with solid fundamentals. Resource stocks far outperformed the broader market, underpinned by expectations of greatly improved profitability amid an industry recovery and a weaker dollar, with many starting to issue upbeat forecasts for mid-year performance.
An index tracking major material shares settled at a 3-month high, and is set for the fifth straight week of gains. Nonferrous industry bellwether China Molybdenum shot up the maximum allowed 10 percent to a 19-month high, having surged 53.5 percent in 2017.
Shanghai Fosun Pharma, a listed unit of Chinese conglomerate Fosun, slumped as much as 8.9 percent before ending down 3.7 percent, amid what the company called “sheer rumour” that its billionaire chairman Guo Guangchang had gone missing.