China stocks rise as Shanghai says 'victory' against Covid-19 getting closer

China stocks rise as Shanghai says 'victory' against Covid-19 getting closer
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SHANGHAI (May 13): China stocks rose on Friday (May 13) as Shanghai said it aims this month to halt the spread of Covid-19 in areas outside its tightly regulated quarantine zones, while authorities' pledges to support the economy also lifted sentiment.

The blue-chip CSI 300 Index rose 0.8% to 3,988.60, while the Shanghai Composite Index gained 1% to 3,084.28 points.

The Hang Seng Index rose 2.7% to 19,898.77, while the China Enterprises Index gained 3.2% to 6,807.03 points.

For the week, the CSI 300 Index gained 2%, its biggest jump in six weeks since Shanghai entered a city-wide lockdown. The Shanghai Composite Index climbed the most in three months, up 2.8%.

The Hang Seng Index edged down 0.5% for the week, while the China Enterprises Index was almost flat.

Shanghai's deputy mayor Wu Qing said at a news conference that "victory" was getting closer but the fight against China's biggest-ever Covid-19 outbreak "still requires the joint exertions of every citizen".

Wu also said Shanghai would start to steadily ease traffic restrictions and open shops this month, while Beijing on Thursday denied rumours of sweeping lockdown measures and urged people to avoid panic buying of essential items and stay at home. 

The Covid-19 resurgence is having a "huge impact" on China's economy, but that impact will be short-lived, the official Xinhua news agency quoted the deputy head of the National Bureau of statistics as saying on Thursday.

Earlier that day, officials said China is ready to take new steps to support the economy when the need arises.

China wants to promote the healthy development of the online platform economy, the state Cabinet said on Friday while talking about measures to boost prospects for college graduates. 

Morgan Stanley analysts said in a note that sentiment saw a marginal uptick versus the pre-Labour Day reading, while suggesting patience in the near term.

"The timing and scale of follow-through actions from the recent top-down easing stance remain contingent on the Covid-19 situation, complicated by quantitative tightening and global geopolitical tension," they added.

Real estate developers jumped 4.9%, while automobiles surged 6.6% and coal miners added 3.4%.

US Federal Reserve chair Jerome Powell said on Thursday that the battle to control inflation would "include some pain". 

Tech giants listed in Hong Kong surged 4.5%, with food delivery firm Meituan up 6.8%, providing the biggest boost to the Hang Seng benchmark.

Mainland developers trading in Hong Kong climbed 5.3%.