[SHANGHAI] China's stocks pared the biggest weekly slide in five years amid speculation weak trade data will spur the government to boost economic growth and on optimism over the prospects for an exchange link between Shenzhen and Hong Kong.
The Shanghai Composite Index rebounded 1.5 per cent to 4,175.52 at 11.07 am, set to end a three-day, 8.2 per cent loss. The unexpected slide in exports will put more pressure on the central bank to add to stimulus after two cuts in interest rates and reserve-requirement ratios each since November.
"The government is aware that global trade is slowing and the domestic economy is slowing," said Khiem Do, Hong Kong- based head of multi-asset strategy at Baring Asset Management Ltd. "We do expect more stimulus. Sentiment in China is also helped by the news of the Shenzhen-Hong Kong link starting in the fourth quarter."
The Shanghai gauge has slid 6.4 percent this week, poised for the biggest weekly drop since July 2010, on concern new share sales will sap funds and after valuations jumped to five- year highs. The CSI 300 Index gained 1 per cent. Hong Kong's Hang Seng China Enterprises Index advanced 1.4 per cent, while the Hang Seng Index added 0.8 per cent.