China Stocks Shoot Higher On 'Silk Road' Details

MarketWatch Pulse

Hong Kong and Shanghai stocks both popped higher Monday morning after China unveiled more details and projections for its "New Silk Road" plan to boost trade and economic relations with the rest of Eurasia and Africa. The Hang Seng Index advanced 1.2%, with the mainland-China-tracking Hang Seng China Enterpriese rallying 2.7%. On the mainland itself, the Shanghai Composite Index rose 0.9%. Over the weekend, Chinese President Xi Jinping said he expected the "One Belt, One Road" initiative, part of the wider Silk Road trade-promotion plan to better link regional infrastructures, to boost annual trade between China and the economies invovled to more than $2.5 trillion. More importantly for the market, the plan is slated to include investment in railways, roads, power grids, oil and gas pipelines, ports and other such facilities, and this helped lift the related stocks. Railway and construction shares surged in Hong Kong, as China Railway Group Ltd. soared 13.9%, China Railway Construction Corp. climbed 12.4%, and Zhuzhou CSR Times Electric Co. rallied 6.9%. Shippng shares also shined, as China Shipping Container Lines Co. improved by 8.4%, China Cosco Holdings Co. jumped 6.8%, and Sinotrans Shipping Ltd. climbed 4.4%. The tech sector also rallied across the board, as NetDragon Websoft Inc. surged 10.6%, Kingsoft Corp. gained 7.8%, Kingdee International Software Group rose 6.9%, and Hang Seng Index heavyweight Tencent Holdings Ltd. advanced 2.3%. In earnings news, China Eastern Airlines Corp. zoomed 8.1% higher after recording a 45% jump in net profit for last year, boosted by strong air-traffic growth and lower fuel costs. Among other market movers, power producer Datang International Power Generation Co. gained 6.2%, offshore oil producer Cnooc Ltd. advanced 3.4%, PetroChina Co. rose 2%, and China Petroleum & Chemical Corp., or Sinopec, improved by 1.7%.

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