Chinese Consumer Stocks Surge After Politburo Meeting Signals Support for Consumption
By Sherry Qin
Chinese consumer stocks surged in morning trading in Hong Kong and Shanghai, as investors bet on a faster domestic consumption recovery.
The rally came after the Politburo, China's top decision-making body, reinforced its commitment to expanding domestic demand and letting consumption drive economic growth at its July meeting, held Monday.
The Politburo's sector targets for support included automobiles, electronics, and home-related goods as well as services such as sports, leisure activities and tourism. The news followed the policy packages to support the consumption of automobiles and electronics by National Development and Reform Commission on July 21.
Home appliance and furniture stocks jumped on the news, with Guangdong Hotata Technology Group and Guangdong Piano Customized Furniture both up 10%, the maximum daily rise permitted in China.
Liquor stocks rose broadly in Shanghai, with Shede Spirits limit-up and Luzhou Lao Jiao up 7.4%.
Some economists observe that details from the meeting readout lack big-bang stimulus for near-term growth. "So far, services consumption has been the driving force of the recovery, though it has not fully broadened out to other areas of consumption, which may depend on an improvement in household confidence and further stabilization in the housing sector," HSBC Economist Erin Xin said in a note. In Hong Kong, Trip.com climbed 4.1% and Hotpot chain Haidilao International jumped 4.2%.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
July 24, 2023 23:37 ET (03:37 GMT)
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