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China: Stocks flat ahead of Fed rate decision; energy shares jump
[SHANGHAI] China stocks ended Wednesday roughly flat despite a jump in energy shares, as property majors slumped and most other sectors weakened ahead of an expected rise in US interest rates.
The blue-chip CSI300 index fell 0.2 per cent, to 3,685.44, while the Shanghai Composite Index gained 0.2 per cent, to 3,516.19 points.
Investors drew some encouragement from news that China plans to issue significantly more government bonds next year to aid the economy, but sentiment was cautious ahead of the Federal Reserve's imminent rate decision.
The Chinese Academy of Social Sciences (CASS), a top government think tank, forecast that with moderate expansion in fiscal spending, China's economy was likely to grow between 6.6 per cent and 6.8 per cent in 2016.
Li Quansheng, fund manager at Bosera Asset Management expected the valuation gap between blue-chip and small-cap shares would narrow, while ruling out wild fluctuation in the main indexes. "There's still ample liquidity in the market, but the current valuation, especially for the start-up board ChiNext, is not low," Li said.
Oil stocks jumped on Wednesday after the Chinese government said it would "postpone" expected cuts in retail petrol and diesel prices, a move that would aid refiners'profitability.
Index heavyweight PetroChina rose 1.1 per cent, while Sinopec gained 2.3 per cent.
But most other sectors fell, with real estate stocks leading the decline on profit-taking.