China's benchmark stock gauge rose for the first time in five sessions as banks and insurers rallied after policymakers left a key loan rate unchanged.
The Shanghai Composite Index rose 0.1 per cent, or 1.48 points, to 2,939.62 on Monday, as a late rally lifted the benchmark into positive territory. It had dropped 2.3 per cent in the previous four sessions. Hong Kong's Hang Seng Index was almost unchanged at 26,725.68.
Traders piled into banks after China kept the loan prime rate unchanged at 4.2 per cent this month, quelling concern that banks' lending margins will be hurt. The consensus estimate was a cut of five basis points in the rate, according to Bloomberg data. China Life Insurance also lifted sentiment, jumping 5 per cent after forecasting a profit increase of as much as 200 per cent for the first nine months.
"Positive earnings expectations and the surprise decision not to lower the loan prime rate give banking shares considerable support," said Gerry Alfonso, director of the international business department at Shenwan Hongyuan Group in Shanghai. The unchanged loan prime rate was "likely to have only a short-lived impact on the equity market as the expected cut was marginal".
Poor economic data will not derail the rebound of Chinese stocks, as earnings growth may have troughed in the third quarter and a slew of market reforms may boost sentiment, said Citic Securities. Easing of listed companies' mergers and acquisitions, the push for a registration system for initial public offerings by more small companies and tighter delisting rules will improve the quality of listed companies, the nation's biggest publicly traded brokerage said in a note on Monday.
A gauge of 34 listed banks on the mainland's exchanges rose 1.4 per cent. China Citic Bank added 4.3 per cent to 6.28 yuan and Ping An Bank advanced 2.3 per cent to 16.89 yuan.
Hangzhou Hikvision Digital Technology, the Chinese surveillance camera maker put on a trade blacklist by the US government for alleged human rights violations, climbed 3.8 per cent to 31.61 yuan, its biggest gain in seven weeks. The company said profit for the fourth quarter may increase by as much as 41 per cent from a year earlier after earnings grew by 17 per cent in the third quarter.
Hikvision's median profit growth would be 20 per cent for the last three months of the year, according to Shenwan Hongyuan Group.
Tianfeng Securities plummeted by the 10 per cent daily limit to 6.98 yuan after the lock-up period of a 35.4 per cent stake in the brokerage expired on Monday. Some 1.83 billion shares held by 36 pre-IPO shareholders became available for public trading after Tianfeng's debut in Shanghai a year ago.
In Hong Kong, Xiaomi and Meituan Dianping rallied after the mainland's exchanges officially revised rules to allow onshore investors to buy Hong Kong-listed Chinese companies with dual-class share structures starting next week. Smartphone maker Xiaomi surged 5 per cent to HK$8.98, while internet service giant Meituan climbed 4.3 per cent to HK$96.75. Xiaomi's rise was also fuelled after the founder said on Sunday that the company plans to launch 10 smartphone models based on 5G technology.
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