China stocks trade higher back by upbeat economic data
HONG KONG: Chinese stocks mostly traded higher by midday on Monday as positive economic data boosted hopes for increasing demand in the consuming sector.
The Hang Seng Index added 1.1% to 16,534.49, again led by the tech index, which surged by 2%. Among gainers, JD.com jumped 6.2% to 98.35 Hong Kong dollars, E-commerce giant Alibaba Group Holding gained 1.9%, and Tencent was 2% higher.
Elsewhere in China, the Shanghai Composite Index fluctuated between small gains and losses during morning trading and ended at 3,052.28 by midday, with 0.2% gain. The smaller market in Shenzhen rose 1.3%.
China's consumer price index, the CPI, rebounded by 0.7% in February and reached its highest level in 11 months, driven by a surge in consumption during the holiday season, according to data from China's statistics bureau over the weekend.
Meanwhile, the producer price index, which measures the change in the selling prices received by domestic producers for their output, declined by 2.7% year-on-year, extending a downward trend for 17 consecutive months.
"Deflation remains a significant concern among investors regarding China's economic landscape," said Stephen Innes of SPI Asset Management.
He said that beyond increased government spending, it is evident that the Chinese economy requires structural reforms to encourage citizens to spend rather than save.
The National People's Congress, one of China's biggest political events, concludes its annual session Monday in Beijing. Last week, Premier Li Qiang announced a target of 5% economic growth this year, while acknowledging it will be a challenging goal in difficult times.
Critics expressed reservations regarding the sustainability of China's economic recovery, saying that addressing the underlying challenges needs long-term solutions.
These solutions include establishing a robust social safety net, a higher labor share of income, and improved retirement benefits, Innes said.
"However, none of these changes are imminent in the near term," he added.
By RSS/AP
