Chinese Stocks Surge on Consumer-Led Growth Initiatives

Chinese stocks increased significantly, driven by consumer shares, following an announcement from Hohhot city to enhance birth rates. Major consumer stocks such as Yili and Mengniu Dairy saw significant gains. Anticipation builds for a press conference detailing measures to enhance domestic consumption, potentially benefiting consumer stocks.

Chinese stocks ended the week on a high note, buoyed by consumer shares, after a northern Chinese city revealed initiatives to boost birth rates. Investors are eagerly awaiting a press conference next week, expecting additional measures to amplify domestic consumption.

The country's blue-chip CSI300 Index saw a rise of 2.4%, while the Shanghai Composite Index increased by 1.8%. Hong Kong's Hang Seng also climbed 2.1%. The city of Hohhot in Inner Mongolia announced cash subsidies for couples having children, an effort to increase the nation's birth rates. Investors predict that other cities and provinces might implement similar strategies.

Consumer staples shares experienced a 3.9% surge, with Yili rising by 8.6% and Mengniu Dairy climbing 9.0% in Hong Kong. Liquor shares also saw gains, with Moutai increasing by 5.9%. Following the National People's Congress, UBS Strategist James Wang shifted preference from internet to consumer stocks, highlighting a policy trend towards consumption. Market participants are keenly awaiting Monday's press conference for further measures boosting consumption.

(With inputs from agencies.)