China stocks gain on easing covid curbs, softer U.S. inflation data

HONG KONG: China and Hong Kong stocks rose on Wednesday as easing COVID-19 curbs and refocus on economic growth underpinned sentiment, with softer-than-expected U.S. inflation data fuelling expectation of a slowdown in interest rate hikes.

China's blue-chip CSI 300 Index rose 0.21%, while the Shanghai Composite Index edged up 0.13%. The Hang Seng Index climbed 0.69% and the Hang Seng China Enterprises Index advanced 0.92%.

Asian stocks rose, bonds were firm and the dollar nursed losses after data showed U.S. consumer prices barely rose in November, stoking hopes that inflation has peaked and interest rate increases will slow and eventually stop in 2023.

When China's leaders gather this month to set next year's economic agenda, they will likely map out more stimulus steps, eager to underpin growth and to ease disruptions caused by a sudden end to COVID-19 curbs, policy insiders and analysts said.

China's National Health Commission will as of Wednesday stop reporting new asymptomatic COVID-19 infections. The health authority reported 2,291 new symptomatic COVID-19 infections on Dec. 13.

Morgan Stanley analysts expect underlying infections peaking around the Lunar New Year but China will not go back to lockdowns. "COVID is now in its least threatening state from the standpoint of severe diseases/deaths, so we don't expect restrictions to be tightened," Morgan Stanley analysts led by chief Asia economist Chetan Ahya wrote in a note.

Shares of Chinese chipmakers jumped in morning trade after a Reuters report that Beijing was working on a $143 billion package to aid the country's semiconductor sector.

China's SSE STAR Chip Index opened nearly 4% higher before narrowing the gain to 0.8% by noon. Shanghai-listed shares of industry giant Semiconductor Manufacturing International Corp (SMIC) rose 2.9% to a four-month high.

Liquor makers and tourism stocks jumped 2.4% and 1.8%, respectively, leading the gains in China-A shares. Hong Kong-listed tech giants were nearly flat, with Meituan and Tencent up 2.1% and 2% respectively.