(Bloomberg) -- Chinese stocks finished Monday’s session marginally higher, as investors weighed the move by commercial banks to slash lending rates against calls for increased government spending to help the economy turn a corner.
The CSI 300 Index was up 0.3% at the close, after swinging between gains and losses earlier. Small-cap gauges outperformed, with the CSI 1000 Index climbing 1.9%. The Beijing Stock Exchange 50 Index surged more than 16% after an official at China’s top securities regulator called for more participation from institutional investors.
The modest gains for the benchmark CSI 300 come after its 3.6% rally on Friday, sparked by President Xi Jinping’s emphasis on technology development and a slew of central bank statements over policy support. The People’s Bank of China gave the market a jolt in late September, with a stimulus blitz that sent stock prices soaring, but the rally has lost some steam amid the lack of a large, concrete fiscal-spending plan.
Chinese commercial banks cut the one-year and five-year loan prime rates by more than the market had expected on Monday. Separately, Bank of China said it has made loan commitments to 32 listed companies for their share buyback plans, following a specialized re-lending facility recently launched by the central bank to encourage repurchases.
“The recent equity swap initiatives and share buyback plans for PBOC were net positive,” said Billy Leung, an investment strategist at Global X ETFs. “What we probably need to see is much more aggressive liquidity injection and also targeted fiscal measures.”
Chipmakers Semiconductor Manufacturing International Corp. and Cambricon Technologies Corp. were among the top performers on the CSI 300 on Monday, extending their rally from Friday. Shares of solar companies also jumped after an industry association appealed for rational module prices.
Still, many investors and economists are holding out hope for further fiscal stimulus. A gauge of Chinese property stocks fell nearly 1%.
“What is still missing is a clear policy from the central government to remove that risk of buying that primary property,” Christopher Wood, global head of equity strategy at Jefferies Financial Group Inc., said in a Bloomberg TV interview.
In Hong Kong, the Hang Seng China Enterprises Index slid 1.8%, indicating a continued investor preference for Chinese stocks traded on the mainland.
--With assistance from Winnie Hsu, Abhishek Vishnoi and Joanne Wong.
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