Chinese shares post gains despite Moody's downgrade

Updated 2017-05-25 17:00:30 Xinhua

Chinese stocks staged a rally Thursday despite Moody's downgrading of China's credit rating Wednesday, thanks to strong performance of blue-chip companies.

The benchmark Shanghai Composite Index increased 1.43 percent to end the day at 3,107.83 points. The smaller Shenzhen Component Index closed 0.83 percent higher at 9,893.78 points.

The ChiNext Index, China's NASDAQ-style board, ended 0.08 percent higher to close at 1,777.69 points.

Total turnover on the two bourses stood at 428.7 billion yuan (about 62.3 billion U.S. dollars).

More than 2,100 stocks gained across the two bourses, and financial shares were among the biggest winners of the day.

Guoyuan Securities rose by the daily limit of 10 percent to end at 11.99 yuan, and China Merchants Bank climbed 4.75 percent to close at 22.95 yuan.

In a statement released Wednesday, Moody's said it had downgraded China's long-term local currency and foreign currency issuer ratings to A1 from Aa3 and changed the outlook to stable from negative.

It attributed the move to expectations that China's economy-wide leverage would increase over the coming years, planned reform program would likely slow, but not prevent the rise in leverage, and sustained policy stimulus would cause rising debt.

Sun Binbin, chief analyst with TF Securities, believes the downgrade showed that Moody's "does not quite understand China's development pattern and path." He expects limited impact on the economy as the fundamentals are stable.

The Chinese economy roared back strongly in the beginning of 2017, with substantial rebounds in nearly all indicators.

Gross domestic product grew 6.9 percent in the first quarter, above the full-year target of 6.5 percent and the 6.8-percent growth in the fourth quarter of 2016. For the first four months, fiscal revenue, a gauge of the government's ability to conduct macroeconomic regulation, jumped 11.8 percent, compared to 8.6 percent the same period last year.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58October 18 2017 00:54:57

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16October 18 2017 00:54:57

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18October 18 2017 00:54:57

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords