July 31, 2024 at 01:32 am EDT
SHANGHAI,(Reuters) - China stocks jumped nearly 2% on Wednesday, led by consumer and tech shares, as investors welcomed a Politburo meeting that stressed the need to boost consumption and the appointment of a new vice chairman at the securities regulator.
Hong Kong shares also rose.
Sentiment was also lifted by a firmer yuan ahead of a U.S. Federal Reserve policy review, which is expected to pave the way for an interest rate cut in September. The Fed is to announce the outcome of its review later on Wednesday.
Both the blue-chip CSI300 Index and the Shanghai Composite Index climbed nearly 2% by the end of the morning session, on track for their biggest one-day gains in three months. In Hong Kong, the Hang Seng Index rose 1.9%.
The firmer tone was supported by a meeting on Tuesday of China's Politburo, where leaders stressed the need to focus on boosting consumption, deviating from their usual playbook of pouring funds into infrastructure projects.
"Previous policies were ineffective. This time, the leaders hit the nail on the head: consumption," said Yang Tingwu, vice general manager of Tongheng Investment.
The view was echoed by Ting Lu, chief China economist at Nomura.
"This marks the first time the Politburo meeting mentioned counter-cyclical adjustments since July last year, a potential signal that the leadership is aware of the headwinds faced by the economy," Lu said in a note.
Investors also drew inspiration from news that a law enforcement official will replace western-educated Fang Xinghai as vice chairman of China's securities regulator.
Li Ming, chief of the enforcement bureau of the China Securities Regulatory Commission ( CSRC ), will replace Fang, the CSRC announced late on Tuesday.
Stanford-educated Fang has been an advocate of market reform and opening, and has helped introduced a slew of derivative products.
"Many short-selling tools were introduced under Fang's watch, and his removal galvanized the market," said Yang, the fund manager.
"Today's market was lifted by both fundamental and sentimental factors."
China's healthcare and consumer stocks jumped more than 3% as investors expect fresh policies to boost consumption and improve the country's social safety net.
Shanghai's tech-focused

STAR

Market and Shenzhen's start-up board ChiNext also rose.
Some analysts however, added a note of caution.
The signal from the Politburo meeting to boost consumption "is an encouraging direction, but it's not clear if the call will translate into concrete policies," GavekalDragonomics wrote in a note. (Reporting by Shanghai Newsroom; editing by Miral Fahmy and Neil Fullick)

Sumber : Reuters