China stocks end higher as property, infrastructure firms gain

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BEIJING, Jan 18 (Reuters) – China stocks ended higher on Tuesday, with infrastructure and property firms leading the gains as the country’s central bank unexpectedly cut the borrowing costs of its medium-term loans.

** The blue-chip CSI300 index rose 1percent to 4,813.35, while the Shanghai Composite Index gained 0.8percent to 3,569.91. Both indexes posted their best daily performance since last Wednesday.

** China’s central bank on Monday cut the borrowing costs of its medium-term loans for the first time since April 2020. Analysts believe the rate cuts could lead to strong infrastructure spending, credit growth and support for the real estate sector in 2022.

** Real estate developers jumped 4.1percent on Tuesday, amid news on Shanghai Pudong Development Bank Co’s bond issuance to fund real estate acquisitions.

** The bond sales plan by the Shanghai government-controlled bank, the first Chinese bank to do so, pointed to a broadening of financing channels for the property sector, analyst said. More financial institutions were expected to follow suit.

** Beijing has been encouraging large developers and banks to acquire quality assets from cash-strapped real estate firms to ease the liquidity pressure on the sector.

** Investor sentiment was also lifted by comments from Jin Xiandong, an official of China’s National Development and Reform Commission, reassuring markets that news of defaults by some highly leveraged real estate developers will not affect Chinese companies’ overseas bonds issuance.

** The infrastructure sub-index jumped 3.7percent, while the construction and engineering sub-index surged 4.3percent.

(Reporting by Cheng Leng in Beijing, Jason Xue and Andrew Galbraith in Shanghai; Editing by Subhranshu Sahu)

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