China stocks end higher on industrial firms’ upbeat earnings | Reuters

China stocks ended higher on Monday, as upbeat earnings at industrial firms boosted sentiment, though foreign selling through the Stock Connect programme capped gains.

** The blue-chip CSI300 index rose as much as 1%, before closing up 0.2% at 5,046.88, while the Shanghai Composite Index added 0.5% to 3,435.29.

** Annual profits at China’s industrial firms surged in the first two months of 2021, highlighting a rebound in the country’s manufacturing sector and a broad revival in economic activity from the coronavirus crisis early last year.

** Aiding sentiment, profit growth rose at the country’s major lenders in the fourth quarter of 2020.

** Three of China’s largest lenders on Friday booked a jump in fourth-quarter net profit of well over 40%, the first green shoots since the COVID-19 pandemic battered borrowers last year.

** Though some analysts remained cautious for the moment.

** There are signs that China and the U.S. both are marginally tightening their monetary policies, which could have a mid-term impact on the market, SWS Research analysts said in a note.

** For the A-share market, the direction of policy tightening has been further confirmed and a favourable macroeconomic environment has also ended ahead of schedule, the brokerage added.

** The CSI300 index has lost nearly 15% this year, led by high-flying sectors including consumer, healthcare and new energy firms. Worries that Beijing could move to rein in bubbles in the country’s financial markets had weighed on the markets.

** Foreign investors turned cautious, selling a net 3.5 billion yuan worth of A-shares on Monday via the Stock Connect linking mainland and Hong Kong, according to Refinitiv data, as banks’ warnings on losses soured sentiment.

** Nomura and Credit Suisse warned on Monday they were facing significant losses after a U.S. hedge fund, named by sources as Archegos Capital, defaulted on margin calls. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)

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