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China stocks end higher

China stocks end higher

China stocks closed up on Monday, as markets played catch-up with last week's gains in global equities and rebounded from sharp sell-offs seen before the week-long Lunar New Year holiday.To get more shanghai stock exchange news, you can visit shine news official website.

The blue-chip CSI300 index rose 1.5% to 4,634.09, while the Shanghai Composite Index gained 2% to 3,429.58 points.

China's market liquidity will remain reasonably ample even as seasonal flows of money injected ahead of the Lunar New Year holiday are recouped, the official Shanghai Securities News said on Monday.

The CSI Construction Engineering Index and the infrastructure sub-index jumped 6.2% and 4.6% respectively, after China's state planner said it would accelerate the construction of new infrastructure.The National Development and Reform Commission also said more efforts would be made to expand domestic demand, China Daily reported.

Banks added 3.3%, energy shares surged 4.9%, and automobiles rose 2.8%.

Tourism stocks reversed earlier losses and edged up 0.2%, while media stocks lost 0.8%, as tourism revenues and box office sales during the holiday both disappointed.

"Despite a nearly 48% increase in the number of people returning to their hometowns for the Lunar New Year holiday compared to last year, a contraction in movie box office sales and tourism revenues - due perhaps to the worsening economy - suggests that this did not result in materially higher consumption demand," said Nomura in a note.

Activity in China's services sector in January expanded at the slowest pace in five months, as a surge in local COVID-19 cases and containment measures hit new business and consumer sentiment.

Nomura added that they expect to see more real and more supportive measures only after the annual National People's Congress conference in early March. (Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)China is the biggest single consumer of practically everything. It matters outside China,” said Rob Carnell, chief Asia economist for ING. “If China’s consumption is getting knocked down by COVID, it is going to be something that filters down the supply chain and affects countries in the region.”

Officials are trying to defend China’s role in global manufacturing supply lines by making sure goods get to customers, said Louis Kuijs, chief Asia-Pacific economist for S&P Global Ratings. He noted that after previous shutdowns, factories caught up with orders by working overtime.

“The impact on supply chains is not as big as many outside observers fear,” Kuijs said. “These restrictions tend to have a larger impact on spending and the demand side in China.”

The impact on Shanghai should be “relatively muted” if the city contains its outbreak as the southern business center of Shenzhen did earlier, said Carnell.

Shenzhen, a tech and finance center of 17.5 million people, imposed a similar citywide shutdown in mid-March and reopened a week later.

Employees of financial industries can work from home, while automakers and other big manufacturers can have workers live at factories in a “closed loop system” that isolates them from contact with the outside.

General Motors Co. and Volkswagen AG said their factories in Shanghai were operating normally. GM said in an email it was carrying out “contingency plans on a global basis” with suppliers to reduce COVID-related uncertainties.

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