(Bloomberg) — Chinese stocks are ending July on an optimistic note as Beijing showcases its determination to shore up an economy that’s lost steam in recent weeks.
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Equities climbed again on Monday, adding to last week’s rally and helping key gauges cap their best month since January. China’s top economic planning agency released a wide-ranging policy document containing some recently announced consumption-related initiatives, and a separate report said big cities such as Beijing and Shenzhen may ease curbs on the property sector.
That’s raised bets regulators are keen to follow through on the promises made at last week’s Politburo meeting. Having been disappointed by a lack of policy execution repeatedly in the past, investors are hoping things will be different this time. Overseas funds bought onshore China stocks for a fifth straight session on Monday, taking net purchases since the key meeting to 49 billion yuan ($6.7 billion).
“The government’s stance has clearly turned more supportive,” said Vey-Sern Ling, managing director at Union Bancaire Privee. There is more confidence that China will back up stimulus talk with concrete measures, he added.
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To-be-sure, China’s economic recovery continues a concern and it remains to be seen how soon and how much of an impact can the latest measures make. Economic activity lost more steam in July with manufacturing contracting again and the services sector weakening, data showed on Monday.
Further, Beijing has stopped short of providing direct fiscal support to consumers and the latest steps are targeted toward improving the supply of goods in the economy, rather than demand.
The Hang Seng China Enterprises Index, which tracks the nation’s stocks listed in Hong Kong, jumped as much as 3.2% on Monday before finishing 1.3% higher. It surged 6.1% surge last week. The CSI 300 Index of mainland shares rose 0.6%. Both measures posted their best monthly gain since January. A Bloomberg Intelligence gauge of real…