China, HK stocks rise on strong foreign inflows amid signs COVID peaked

Jan 16 (Reuters) – China stocks jumped to a four-month high on Monday, aided by strong foreign inflows, while Hong Kong shares edged up as investors doubled down their bets on economic recovery after Chinese health officials said COVID-19 infections in the country had peaked.

** China’s blue-chip CSI300 Index ended the session up 1.6%, while the Shanghai Composite Index climbed 1%. Hong Kong’s Hang Seng Index HSI was 0.04% higher.

** Net foreign buying of China-listed stocks via Stock Connect hit a two-month high of 15.4 billion yuan (USD 2.29 billion) on Monday. Net buying so far this year has exceeded USD 9 billion as foreign funds snap up Chinese financials and consumer stocks, according to Goldman Sachs.

** Beijing said on Saturday nearly 60,000 people with COVID-19 had died in hospital since it abandoned its zero-COVID policy last month. But on the bright side, Chinese health officials said the number of patients visiting fever clinics and needing emergency treatment was steadily falling, and the number of severe cases had also peaked.

** “Overall, the latest data confirmed that the worst of China’s exit wave is behind us,” OCBC Bank wrote in a note on Monday.

** China also reported a sharp rise in travel ahead of the Lunar New Year holiday，while the Chinese gambling hub of Macau expected a Spring Festival boom in tourism.

** “Stars are aligning for a China/HK rebound in 2023 after a torrid 2022,” DBS wrote. “It won’t be a smooth ride. But 4Q22-1Q23 is likely the cyclical trough, in our view.”

** Chinese shares rose across the board.

** China’s food and beverage stocks jumped .CSI000815 on bets excessive savings during the pandemic will be unlocked.

** Chinese infrastructure stocks also rose sharply as local governments announced new spending plans for big projects and set bullish growth target for this year.

(USD 1 = 6.7290 Chinese yuan renminbi)

(Reporting by the Shanghai Newsroom; Editing by Nivedita Bhattacharjee)