Chinese Shares Gain On Stimulus Hopes

By Satya Nagendra Padala | June 15 2012 3:29 AM

Stock markets in Hong Kong and China advanced Friday as weak U.S. economic data and worsening euro zone crisis raised hopes that the major central banks would act to tackle deteriorating global economic conditions.

REUTERS

An investor places his hands on the back of his head in front of an electronic board showing stock information at a brokerage house in Hefei, Anhui province May 2, 2012. China shares climbed 1.8 percent to their highest closing level in seven weeks on Wednesday.

Sponsorship Link

Hong Kong's Hang Seng advanced 1.47 percent, or 276.33 points, to 19,084.73, and Chinese Shanghai Composite rose 0.30 percent or 6.86 points to 2,302.81.

Weaker-than-expected reports on the Labor Department's weekly jobless claims and inflation data renewed hopes that more steps would be taken to boost economic growth when Federal Reserve policymakers meet next week. The number of Americans filing for first-time jobless benefits rose by 6,000 to 386,000 for the week ending June 9.

Market participants are likely to be watchful due to concerns that Greek elections Sunday could lead to the debt-ridden country's exit from the euro area and intensify the regional crisis again. However, hopes of a positive outcome are rising.

Meanwhile, officials from the G20 nations said that central banks were ready to take steps to stabilize financial markets, if needed, by providing liquidity and preventing any credit squeeze after Sunday's Greek election, Reuters has reported.

Shares of resource companies led the gains in Hong Kong on higher commodity prices. Zijin Mining Group advanced 1.47 percent and Angang Steel Co Ltd rose 2.83 percent while Aluminum Corp of China gained 1.57 percent.

European retailer Esprit Holdings surged 8 percent after CLSA upgraded the stock to a buy rating. The company stock plunged more than 30 percent this week after following the sudden resignation of its chief executive Ronald van der Vis. Ronald also said that resignation didn't indicate a crisis at the company.