China stocks rise as economic rebound hopes stay intact

China stocks rose marginally on Wednesday as investor confidence in the country's economic upswing stayed intact, though a drop in financials tamed the broader market's strength.

At the midday break, the Shanghai Composite index was up 0.4 percent at 3,381.35 points. China's blue-chip CSI300 index was up 0.2 percent, with the consumer staples sector rising 0.1 percent and consumption discretionary advancing 0.5 percent. 

Chinese H-shares listed in Hong Kong rose 0.5 percent, while the Hang Seng Index climbed 0.6 percent to 25,088.36. The smaller Shenzhen index added almost one percent, the start-up board ChiNext Composite index gained 1.5 percent and Shanghai's tech-focused STAR50 index rose 1.7 percent​.

Growth in China's services sector slowed in July from a decade high the previous month, but remained in expansion territory, an industry survey showed on Wednesday.

The recovery in the services sector – accounting for 60 percent of the economy – has gathered pace in recent months as the nationwide social restrictions lifted. 

China reported 27 new coronavirus cases in the mainland on Tuesday, down from 36 cases the previous day.

Financial sector stocks, which rallied on cheap valuations in the previous session, fell 0.8 percent on Wednesday.

"We had an upward move from financials yesterday which failed to follow through today," said Alex Wong, director at Ample Finance Group, noting that the sector's outlook remained poor.

"But people are still buying into China consumption, the big caps are doing okay today. The mood in the market is overall positive," he added.

Around the region, MSCI's Asia ex-Japan stock index firmed 0.6 percent while Japan's Nikkei index dipped 0.2 percent.

(Cover via CFP)

Source(s): Reuters