(Bloomberg) -- Chinese stocks gained as investors were encouraged by signs of progress in trade talks and strong January credit data.
The benchmark Shanghai Composite Index rose 1.7 percent as of 10:45 a.m. local time, erasing its decline from the end of last week. The benchmark is up 9.4 percent this year. Shenzhen’s composite gauge advanced 2.2 percent to its highest in nearly five months. Hong Kong equities were also strong, with the Hang Seng Index climbing 1.8 percent to 28,386.
The U.S. and China are set to hold further talks in Washington following meetings in Beijing last week that U.S. President Donald Trump described as “very productive” after being briefed by his team on its return. New yuan loans, which expanded to a record in January, also fueled optimism on Chinese stocks.
“The only two things that investors are looking forward to seeing are easing trade tensions between China and the U.S. and a more proactive policy stance at home,” said Shen Zhengyang, a Shanghai-based analyst with Northeast Securities Co. “Now that there are positive signs on their biggest concerns, the market will definitely trend up.”
Brokerages and energy producers were among the best performers, with sector gauges up at least 3.4 percent. Macau casino stocks rebounded from a bruising Friday, when they fell on concerns the Chinese government’s focus on illegal lending would hurt gaming revenue. JPMorgan (NYSE:JPM) said that reaction in stocks was perhaps overdone. MGM China Holdings Ltd. led casino gains, rising 6.5 percent, its biggest jump since Dec. 3.
To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net
To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Will Davies, David Watkins
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