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Consumer and healthcare firms lead China stocks higher, resources curb gains

China stocks rose on Wednesday morning, underpinned by a strong rally in consumer and healthcare firms, although gains were capped by losses in resources stocks.

Sentiment remained largely positive, as investors expect stability in the financial markets ahead of a key party congress later this month.

The CSI300 index rose 0.6 percent, to 3,911.14 points at the end of the morning session, while the Shanghai Composite Index gained 0.3 percent, to 3,394.27 points.

Most sectors gained ground, led by consumer and healthcare firms, while material and property shares suffered losses.

Kweichow Moutai, China’s largest liquor maker in terms of market value, climbed 1.7 percent to a record high, helping an index tracking major consumer plays gain more than 2 percent to a fresh peak since its launch in 2005.

The large-cap firm has surged more than 60 percent this year, as investors chase sector leaders with steady growth.

“Market participants are now placing more and more stress on fundamentals, as they seek investment opportunities in sectors with solid growth and reasonable valuations, including consumer firms,” said Xu Wei, an analyst with Hongxin Securities.

Healthcare firms also rallied strongly, led by Jiangsu Hengrui Medicine with a 3.1 percent gain, after the country vowed to deepen medical reforms.

An index tracking major medical firms advanced to its highest since June 2015, having gained 20 percent this year.

But resources firms continued to languish amid weakness in commodities market, with China Molybdenum dropping 4.9 percent, dragging material sector 0.9 percent lower.

Source: Reuters

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