Tech sector drives China's stocks higher; HK shares dip
Updates to midday
SHANGHAI, Oct 21 (Reuters) -China's stocks rose on Monday, led by tech shares after Beijing flagged new measures to support the information technology sector and as the country cut benchmark lending rates.
The blue-chip CSI300 Index .CSI300 rose 0.9% by midday, while the Shanghai Composite Index .SSEC gained 0.8%. Hong Kong benchmark Hang Seng .HSI was down 0.6%.
Leading gains in the China market were information technology shares .CSIINT, which rose 5.4%, while the tech-focused STAR50 index .STAR50 surged 6.8%.
China's semiconductor giant SMIC 688981.SS climbed over 15%.
The Beijing Stock Exchange 50 Index .CSI899050 jumped 14% to a record high, after the bourse said on Sunday it would help small- and medium-sized tech companies with training and access to finance so they can list.
Sentiment was also helped by comments from Chinese president Xi Jinping that supported science and technology in economic development.
In policy news, China cut its one- and five-year loan prime rates (LPRs) by 25 basis points each, as anticipated at the monthly fixing on Monday.
Financial stocks .HSNF weighed the Hang Seng index, although property shares .HSNP edged up.
More than 20 Chinese listed companies have announced plans to tap special central bank lending for share purchases, according to exchange filings, days after the People's Bank of China (PBOC) kicked off the $42 billion funding scheme.
China's stocks are down roughly 10% from their Oct. 8 peak after a turbulent few weeks, as investor caution erased some of late September's massive gains made after Beijing's stimulus measures.
"Investors in general agree that both China A-shares and Hong Kong stock markets have entered a phase of volatility... despite monetary policy easing, they are cautious ahead of the U.S. elections, and prefer to wait until the mid-November National People's Congress session," UBS analysts said in a note to investors.
The investment bank has upgraded China's GDP growth forecasts for 2024 and 2025 to 4.8% and 4.5%, respectively, on Friday, after better-than-expected third-quarter GDP and recent policy announcements.
China stocks rally strongly https://reut.rs/3ZQNtV0
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Reporting by Shanghai Newsroom; Editing by Sam Holmes
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