SHANGHAI, Dec 7 (Reuters) - China stocks rose on Tuesday
after the central bank cut the amount of cash banks must hold in
reserve, while investors cautiously watched if Evergrande would
default as the world's most indebted developer inches closer to
a debt restructuring.
In early morning trade, the CSI300 index was up
0.7% at 4,927.23 points, while the Shanghai Composite Index
gained 0.4% to 3,603.32 points.
The Hang Seng index added 1.1% to 23,616.30 points.
The Hong Kong China Enterprises Index gained 1.4% to
Risk appetite got a lift after the People's Bank of China
said on Monday that it would cut the amount of cash that banks
must hold in reserve, its second such move this year, releasing
1.2 trillion yuan ($188 billion) in long-term liquidity to
bolster slowing economic growth.
"The RRR cut is likely to boost investment sentiment and
support valuation in the stock market," said Chaoping Zhu,
Global Market Strategist, J.P. Morgan Asset Management.
"However, investors should also bear in mind that the
long-term reform goals, such as common prosperity, deleveraging
and decarbonization, remain on the table and may continue to
weigh on the investment landscape in China," Zhu said.
On property policies, a Politburo meeting memo on Monday
dropped their previous stance of "housing is for living, not for
speculation," and said it would support the private housing
market to better meet reasonable needs.
Nomura analysts said investors should avoid
over-interpreting the memo, but added that it could be a
positive piece of news as it might correct many of these
Shares of China Evergrande Group rose more than 7%
in early trading on Tuesday as the embattled developer moves
closer toward a restructuring that has loomed for months over
global markets and the world's second-largest economy.
The market is watching if the real-estate giant, which is
grappling with over $300 billion in liabilities and is at risk
of becoming China's biggest ever default, has paid $82.5 million
coupons with a 30-day grace period coming to an end.
A formal default it would trigger a wave of cross defaults
that would ripple through the property sector and beyond.
In mainland markets, the real-estate developers
surged 2.6% while tourism stocks added 2.2%.
In Hong Kong, tech giants rebounded 2%, tracking
gains in Wall Street, after the sector tumbled on ride-hailing
giant Didi's delisting from New York.
E-commerce giant Alibaba Group bounced back from
its record low and surged more than 8%, while Tencent Holdings
and Meituan added 1.5% and 2.6%,
(Reporting by Shanghai Newsroom; Editing by Sherry