Chinese stocks head for weekly gain

Hong Kong - Chinese stocks headed for a second weekly advance as signs of a stabilising economy buoyed industrial companies and outweighed concern about a weakening currency. Hong Kong’s markets were closed due to a typhoon.

The Shanghai Composite Index has advanced 0.8% this week, with virtually all the gains stemming from Tuesday’s 1.4% rally. China Railway and China State Construction Engineering led gains among infrastructure-related firms in the span amid speculation the government will boost spending on bridges to railways. The benchmark gauge was little changed at 07:05, while the yuan fell to a six-year low.

Data released this week painted a brighter picture of the economy, with credit growth last month quickening and third-quarter economic growth and September retail sales meeting expectations.

At the same time, the currency’s drop this month has fueled fears capital outflows will quicken, tightening funding conditions and limiting gains in equities.

"Generally the market isn’t lively," said Wei Wei, an analyst at Huaxi Securities in Shanghai. "Toward year-end, many funds are closing their books, so there’s less money in the market."

Storm signal

Trading in Hong Kong was delayed as Typhoon Haima approached the city. Markets in the city will stay shut for the day if a storm signal isn’t lifted by noon, the exchange operator said.

China’s overheated property market is showing tentative signs of cooling, as authorities stepped up home-buying curbs to avert a housing bubble. New-home prices, excluding government-subsidised housing, gained last month in 63 of the 70 cities the government tracks, down from 64 in August, the National Bureau of Statistics said Friday. Prices dropped in six cities, compared with four a month earlier.

China should improve the efficiency of resource allocation in the capital market to better serve the real economy, according to a front-page commentary on Financial News, a publication of the central bank. Regulators should focus on protecting investor rights and curbing excess speculation, the unsigned article said.

Stricter property curbs and a pause in monetary easing are fueling expectations China may rely more on infrastructure investment to stabilize growth. The nation’s top economic planner approved a railway project in Jiangsu this week.

Read Fin24's top stories trending on Twitter: Fin24’s top stories