China stocks end firmer, resource firms leap on robust profit expectations

SHANGHAI, July 6 (Reuters) – China stocks inched up on
Thursday, helped by strong gains in resource firms on
expectations of robust mid-year earnings.

The blue-chip CSI300 index was unchanged at
3,660.10, while the Shanghai Composite Index added 0.2
percent to 3,212.44 points.

China’s central bank skipped open market operations for the
10th day in a row on Thursday, citing “relatively high”
liquidity levels in the banking system.

“The draining recently indicates that the central bank will
not send any signals of loosening, in order to maintain
relatively balanced liquidity conditions,” Li Lifeng, an analyst
with Sinolink Securities, wrote in a note.

The defensive consumer and health care sectors
lost 0.7 percent and 1.1 percent respectively,
paring strong gains made after their inclusion in a key MSCI
index.

While some doubt the strong trend in blue chips will
continue, many analysts see little risk of a major downturn in
stocks with solid fundamentals.

Resource stocks far outperformed the broader market,
underpinned by expectations of greatly improved profitability
amid an industry recovery and a weaker dollar, with many
starting to issue upbeat forecasts for mid-year performance.

An index tracking major material shares settled
at a 3-month high, and is set for the fifth straight week of
gains.

Nonferrous industry bellwether China Molybdenum
shot up the maximum allowed 10 percent to a 19-month high,
having surged 53.5 percent in 2017.

Shanghai Fosun Pharma, a listed unit of Chinese
conglomerate Fosun, slumped as much as 8.9 percent before ending
down 3.7 percent, amid what the company called “sheer rumour”
that its billionaire chairman Guo Guangchang had gone missing.
(Reporting by Luoyan Liu and Andrew Galbraith; Editing by
Jacqueline Wong)


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