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China's blue-chip index scales 5-1/2-year high on consumer strength

SHANGHAI, Jan 5 (Reuters) - China’s blue-chip index extended gains to hit a five-and-half-year high on Tuesday, aided by jumps in consumer stocks, as investors hoped for more measures to spur the country’s consumption amid the coronavirus outbreak.

** The blue-chip CSI300 index rose 1.9%, to 5,368.50, its highest since June 9, 2015, while the Shanghai Composite Index gained 0.7% to 3,528.68.

** Leading the gains, the CSI300 consumer staples index jumped 5.1%. The CSI300 healthcare index and materials index climbed 2.2% and 2.6%, respectively.

** “Investors could pay attention to residents’ income recovery and measures to stimulate consumption in 2021, as China’s consumption recovery was relatively weak in 2020 amid the coronavirus outbreak,” Luo Kun, director of macro strategy centre at Chasing Securities, noted in a report.

** Analysts and traders also said investors became more bullish on hopes of more policy support and ample liquidity.

** “The spring rally is here now as investors expect more policy support from Beijing and as banks usually lend more at the start of a new year, which would mean more liquidity in the market,” said Fu Yanping, an analyst with China Galaxy Securities.

** Fu said risk appetite also got a boost as Beijing pledged continued policy support and on the Sino-Europe investment deal.

** China last year said it would maintain support for its economic recovery, avoiding a sudden shift in policy, to help keep growth within a reasonable range in 2021.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 1.12%, while Japan’s Nikkei index closed down 0.37%.

** At 07:20 GMT, the yuan was quoted at 6.46 per U.S. dollar, 0.03% firmer than the previous close of 6.462. (Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)

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