China stocks rebound after GDP report surprises
China’s benchmark stock index rebounded from the biggest loss in six years after data showed the nation’s economy grew faster than estimated.
The Shanghai Composite Index rose 1.8% to 3,173.05 after data showed gross domestic product rose 7.3% in the fourth quarter, beating the median estimate of 7.2%, while industrial production and retail sales grew faster than anticipated. The Shanghai gauge slid 7.7% Monday as a tightening of margin-lending regulation sparked a $291 billion rout in the country’s equity market.
“The economic data were mostly better than market estimates, easing concern about deteriorating growth,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai.
The CSI 300 Index climbed 1.2%. Hong Kong’s Hang Seng China Enterprises Index advanced 2.3%. The Hang Seng Index added 0.9%. The ChiNext index jumped 4.3% to a record high.
China’s securities regulator said Monday it isn’t trying to curb equity trading after its efforts to rein in record margin lending spurred the drop in stocks. Investors’ interpretation that regulators are suppressing the stock market through Friday’s action isn’t accurate, China Securities Regulatory Commission spokesman Deng Ge said.
Citic Securities, Haitong Securities and Guotai Junan Securities Co. were suspended from lending money and stocks to new clients for three months, the China Securities Regulatory Commission said last week. The regulator punished nine other brokerages for offenses including allowing unqualified investors to open margin finance and securities lending accounts, it said.
“The comments by the regulator Monday night seem to have, to some degree, calm investors,” said Gerry Alfonso, a China equity sales and trading director at Shenyin & Wanguo Securities Co.
The GDP report Tuesday suggests stimulus efforts have started to boost demand, helping full-year economic growth come close to the government’s target. The central bank cut interest rates for the first time in two years in November and the government accelerated the approval of infrastructure projects to boost an economy mired in a property slump and overcapacity.
GDP expanded 7.4% in 2014, the slowest pace since 1990 and in line with the government’s target of about 7.5%. Industrial production rose 7.9% in December from a year earlier, compared with the 7.4% median estimate of analysts. Retail sales increased 11.9%, compared with the 11.7% seen by economists.
