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China: Stocks rally as Fed's rate decision improves risk appetite
[SHANGHAI] China stocks rallied on Thursday as risk appetite improved after the Federal Reserve raised rates for the first time in nearly a decade, as expected, removing a major source of uncertainty about the US central bank's policy.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.9 per cent, to 3,755.89, while the Shanghai Composite Index gained 1.8 per cent, to 3,580.00 points.
The market was also aided by the Fed's economic outlook that painted the picture of a mild slowdown, and a stabilising property market, easing concerns of a hard landing. "The shoe finally hit the floor," Dacheng Fund Management Co said in a note. "Risk appetite will likely increase because in the short term, there's no need to be excessively cautious." Investors also drew confidence from the People's Bank of China's (PBOC) working report, which forecast China's economic growth would likely slow mildly to 6.8 per cent next year from an expected 6.9 per cent this year, as "the number of positive factors will gradually increase in 2016".
Property shares surged as the PBOC predicted the real estate market would stabilise next year, helping drive growth in fixed-income investment.
Shares of China Vanke Co Ltd jumped their 10 per cent daily limit, after exchange disclosures showed that Jushenghua Co, a firm with property and insurance businesses, continued buying Vanke's shares after recently becoming its biggest shareholder.