China stocks close higher as consumer firms lend support

China stocks close higher as consumer firms lend support

SHANGHAI: China shares ended higher on Monday, underpinned by consumer and liquor stocks, though gains were limited by Sino-US tensions.

The blue-chip CSI300 index rose 1 per cent to 5,625.92, while the Shanghai Composite Index added 0.5 per cent to 3,624.24.

Leading the rally, the CSI300 consumer staples index climbed 4.7 per cent, while the CSI300 consumer discretionary index gained 2.1 per cent.

Liquor makers shined, with Anhui Gujing Distillery Co Ltd and Jiangsu Yanghe Brewery Joint-Stock Co Ltd both rising by their 10 per cent daily trade limits.

“Liquor firms are favoured due to their stable earnings, though investors are also shifting to sectors with low valuations including banking and insurance firms, whose earnings are expected to recover on the back of China’s economic recovery,” said Zheng Zichun, an analyst with AVIC Securities.

Some of Shanghai’s top financiers said the development of China’s exchanges has been hampered in part by management shortcomings and proposed a raft of changes, including improvement in corporate governance, The Paper reported.

Worries over Sino-US tensions weighed on sentiment.

A US aircraft carrier group led by the USS Theodore Roosevelt entered the South China Sea over the weekend to promote “freedom of the seas” at a time of US concern about China-Taiwan tensions and Beijing asserting its maritime agenda.

Bucking the broader trend, shares of Apple Inc supplier Luxshare Precision Industry Co Ltd shed 4 per cent, amid concerns about a patent infringement investigation filed against it from the United States.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.85 per cent, while Japan’s Nikkei index closed up 0.67 per cent.

At 0723 GMT, the yuan was quoted at 6.4777 per US dollar, 0.08 per cent firmer than the previous close of 6.483.

As of 0724 GMT, China’s A-shares were trading at a premium of 34.03 per cent over the Hong Kong-listed H-shares.

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