Blue-chips lead China stocks higher, helped by forecasts of solid earnings

SHANGHAI, July 20 (Reuters) – China’s major stock indexes
rose for a third straight day on Thursday, led by the blue-chip
index reaching a fresh 18-month high, with sentiment lifted by
expectations of robust first-half corporate earnings.

The blue-chip CSI300 index rose 0.5 percent, to
3,747.88 points, while the Shanghai Composite Index
added 0.4 percent to 3,244.86 points.

With the gains, the main indexes have erased losses early
this week when investors panicked amid a sell-off in start-ups.

In contrast, the tech heavy start-up ChiNext is
down 3.3 percent this week as investors shun small-cap firms
that feature dim performances and higher valuations. On
Thursday, the index edged up 0.2 percent.

Ma Wenyu, strategist at Shanxi Securities, said earnings of
cyclical sectors such as mining and steel will keep improving as
Beijing steps up “supply-side reforms” to reduce excess

“State-sector restructuring is expected to provide an
additional market catalyst,” Ma said.

Construction companies Guangxi Liugong Machinery Co
, XXMG Construction Machinery and
Zoomlion Heavy Industry have forecast robust
earnings growth, helped by government infrastructure investment.

China will announce a new batch of “mixed-ownership reforms”
in state-owned enterprises (SOEs) in the third quarter, the
official Shanghai Securities News reported on Thursday.

Most sectors gained, led by real estate and
consumers stocks, as investors expanded their search
for blue-chips still attractively priced.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Richard

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