Investing.com – Chinese stocks rose to their highest level in 2024 on Thursday after the government eased further restrictions on the struggling real estate market and some positive trade data also boosted sentiment.
The blue-chip index rose 1% to a seven-month high and the index rose 0.9% to its highest level since early September.
A rise in mainland Chinese shares led the Hong Kong index to a 1.3% rise, with property stocks leading all three indexes.
Optimism over the property market helped Chinese stocks extend the strong gains seen over the past three months, as a combination of bargain buys and an improving economic outlook led to strong gains in local markets.
Reuters reported that China’s key second-tier city of Hangzhou has lifted all restrictions on home purchases, following similar moves in Shanghai and Beijing earlier this year. Several other major Chinese cities also lifted such restrictions earlier in 2024.
The easing of restrictions comes as China tries to bolster demand in the hard-hit property market, which still accounts for a quarter of the economy despite a three-year slump.
Property market weakness has also become a key driver of China’s economic growth through 2023, especially as more developers face defaults.
Optimism over easing restrictions has boosted Chinese markets even as real estate developers find themselves in trouble. Country garden Holdings Company Ltd (HK:) said it would be unable to make interest payments on key yuan bonds, leading to further default. Country Garden is among several high-profile victims of China’s real estate downturn, along with China. Evergrande Group (GK:).
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Sentiment towards China was also supported by some positive trade data. Economic growth in China rose significantly more than expected in April, raising hopes that domestic consumption and demand are improving amid overall improving economic growth.