April 17 (Reuters) – Shanghai stocks hit their highest level since July as signs of rebound in corporate earnings fuelled hopes of economic recovery in the world’s second-largest economy and lifted the emerging markets stocks index.
The Shanghai Composite Index .SSEC closed 1.4% higher, hitting a nine-month high, while China’s bluechip CSI300 Index .CSI300 and Hong Kong’s Hang Seng Index .HIS added more than 1% each.
More than 300 China-listed companies have published, or forecast first-quarter results, 70% of which have reported year-on-year profit increases, the official Securities News reported.
New home prices rose in March at the fastest pace in 21 months, further lifting China stocks.
“Part of it is the strength of rebound in activity in China that’s boosting sentiment towards Chinese stocks,” said Mitul Kotecha, head of emerging markets strategy at TD Securities.
“Monetary conditions remain fairly easy and inflation has been fairly benign as well and that’s also conducive to more of a positive environment for China’s assets. And also, there is a sense that Chinese officials seem to be taking a softer hand in terms of some of the regulatory constraints in some sectors.”
Investors are now focused on Chinese data on retail sales, industrial output and gross domestic product due on Tuesday.
“There are question marks about the sustainability of this growth momentum going forward, but at least for now, the data is showing that recovery has been fairly solid in the last few months,” Kotecha said.
The MSCI’s index for emerging market stocks .MSCIEF was up 0.3%, as of 0808 GMT.
The EM currencies index .MIEM00000CUS slipped 0.2% against a subdued dollar and was on track to snap a four-day winning streak.
South Africa’s rand ZAR= traded at 18.11 against the dollar, about 0.1% weaker than its closing level on Friday, with investors focused on inflation data this week from Africa’s most industrialised economy.
The Russian rouble RUBUTSTN=MCX hit a one-year low, past 82 against the dollar, waiting for support from month-end tax payments and the positive impact from higher oil prices.
The rouble-based MOEX Russian index .IMOEX gained 1% to touch a one-year high.
Israel’s shekel ILS= rose 1.0% against the dollar and was on track for its best daily performance in nearly three weeks.
Credit ratings agency Moody’s on Friday downgraded its outlook on Israel to stable from positive, citing deterioration of the country’s governance due the recent events around the government’s proposal to overhaul the judiciary.
In central and eastern Europe, the Hungarian forint EURHUF= and the Polish zloty EURPLN= added 0.1% each against the euro, while the Czech crown EURCZK= slipped 0.1% after hitting its highest level last week since 2008.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sonia Cheema)
