SHANGHAI (May 31): Chinese shares closed at five-week highs on Tuesday (May 31), led by a rally in consumer and high-tech stocks, as the market witnessed its highest foreign inflows for this year ahead of Shanghai's imminent reopening of its economy and easing of Covid-19 curbs.
The blue-chip CSI 300 Index ended 1.6% higher at 4,091.52 — the highest closing level since April 19. The Shanghai Composite Index gained 1.2% to 3,186.43.
The Hang Seng Index rose 1.4% to 21,415.20, its highest closing level since April 14, while the China Enterprises Index gained 2.2% to 7,416.75 points.
For the month, the CSI 300 Index saw its biggest jump this year, up 1.9%, while the Hang Seng Index added 1.5%, the most since January.
Refinitiv data showed foreign inflows of 19.7 billion yuan (US$2.96 billion or about RM12.95 billion) into A-shares through Stock Connect, marking the largest amount this year.
The city of Shanghai is set to ease curbs at midnight for residents of low-risk areas, marking an end to a two-month lockdown for most of the city.
But the economic drag of lockdowns is unlikely to be lifted quickly, with public areas required to cap people flows and residents subject to close monitoring and regular testing.
"Shanghai's phased-in reopening may only represent a respite rather than a turning point," economists at Nomura said in a note.
"The real turning point will be marked by a shift in China's stance on its zero-Covid strategy rather than headline Covid-19 caseloads, the easing of some lockdowns or monthly activity data."
An official Chinese manufacturing survey showed activity contracted more slowly in May as coronavirus curbs were relaxed, but ongoing movement controls continue to dim the growth outlook.
China's Cabinet unveiled a package of 33 measures, which was announced last week, covering fiscal, financial, investment and industrial policies, to revive the pandemic-ravaged economy.
China will promote healthy development of platform companies, which are expected to play a role in stabilising jobs, according to the measures.
Consumer staples climbed 2.8% and information technology jumped 3.3%, while semiconductors and new energy shares added more than 2% each.
Tech giants listed in Hong Kong rose 3%, with food-delivery giant Meituan surging 6.8% to become the biggest boost to the Hang Seng benchmark.
Mainland developers trading in Hong Kong gained roughly 2%, with Seazen Group Ltd up more than 7% as it said it had sold green notes worth US$100 million, the first offshore bond to be issued by a Chinese property developer this year without some form of credit enhancement.