© Reuters.
By Amber Warrick
Investing.com — Chinese stock markets rallied on Monday as trading resumed after the Lunar New Year holiday, as the government’s commitment to boost spending and support economic growth also helped sentiment.
The index rose 1.3%, while the index added 0.6%, with most sectors trading positively. Auto and industrial stocks were the best performers in early trading, while energy stocks fell back.
State media reports suggested that retail travel and spending rebounded sharply to near pre-pandemic levels over the holidays, boding well for the Chinese economy. The 2023 Lunar New Year celebrations were the first in three years to be held without any anti-COVID restrictions, after the country began to ease its strict zero-COVID policy in December.
China also recently reopened its international borders, cementing a move away from the zero-COVID policy that had rocked the economy since 2020.
This week’s focus turns key, which is expected to have improved in January from the previous month as the country relaxed more anti-COVID measures.
But overall activity is still expected to remain in contractionary territory as the world’s second-largest economy reels from the fallout from tight anti-COVID restrictions through 2022. Those restrictions also caused a sharp slowdown in economic growth in China, although the country still got ahead. better than expected during the fourth quarter.
China is struggling to shore up growth, and the government has implemented a series of stimulus measures through 2022 to support the economy. Reports over the weekend said the country’s State Council has pledged to boost local economic growth and consumption this year.
The rise in COVID-19 infections in the country is also expected to delay further economic recovery as the country grapples with its worst COVID-19 outbreak yet.
But health authorities recently reported a sharp drop in new deaths from the virus, even as the Lunar New Year holiday increased the chances of virus transmission.
Hong Kong stocks lagged their Chinese peers, with the index slipping 0.5% on weakness in major technology stocks, ahead of a slew of key gains this week. Broader Asian stocks were also muted in anticipation this week.
