China, Hong Kong stocks edge higher as Beijing vows measures to stabilise markets

Mainland Chinese and Hong Kong stocks edged higher on Monday, tracking gains across regional markets, as Beijing renewed its commitment to stabilising the capital market amid concerns over economic weakness and volatile equity markets, according to a report by Reuters.

At the midday break, China's benchmark Shanghai Composite Index rose 0.5%, while the blue-chip CSI300 Index gained 0.3%. The Shenzhen Composite Index advanced 0.4%, while the technology-focused ChiNext Composite Index climbed 0.6%. Shanghai's STAR50 Index added 0.7%.

The gains came after China's State Council on Friday called for further efforts to strengthen mechanisms to stabilise the capital market and improve the stock market's underlying stability, state television CCTV reported.

The report by Reuters, citing analysts at Societe Generale, stated that China's economic indicators and equity market performance had once again prompted policymakers to introduce fresh measures to support stocks. While these steps could help establish a floor for investor sentiment, a sustained recovery would require stronger corporate earnings, improved domestic demand and reflation, the analysts said.

Fresh inflation data released on Monday highlighted the challenges facing the world's second-largest economy. China's producer price inflation accelerated in October to its fastest pace in nearly four-and-a-half years, driven by higher global oil prices that increased manufacturing costs. However, consumer inflation cooled amid continued weakness in domestic demand.

In Hong Kong, the benchmark Hang Seng Index edged up 0.2%, while the city's technology stocks gained 0.1%.

Across the broader region, Asian equity markets and US stock futures made a steady start to the week, moving into positive territory after a volatile previous week. According to Reuters, concerns over demand for computer chips had triggered sharp selling in technology-heavy Asian markets, pushing several indices towards some of their steepest declines in years.

Investors are now assessing whether Beijing's renewed policy support can improve market sentiment, even as concerns over domestic demand and the global technology outlook continue to weigh on risk appetite.