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China stocks gain after 3 days as techs shine

SHANGHAI, June 17 (Reuters) - China stocks rose on Thursday after three straight sessions of losses, as subdued factory output data eased fears of policy tightening in the world’s second-largest economy, while tech firms shined on report of chip push.

** The blue-chip CSI300 index rose 0.4% to 5,101.89, while the Shanghai Composite Index added 0.2% to 3,525.60.

** The start-up board ChiNext climbed 2%, while Shanghai’s tech-focused STAR50 index rallied 4.8%.

** The gains came after a three-day losing streak, with the CSI300 falling the most in two months on Wednesday.

** Growth in China’s factory output slowed for a third straight month in May, likely weighed down by disruptions caused by COVID-19 outbreaks in the country’s southern export powerhouse of Guangdong.

** The U.S. Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases.

** Tech firms, in particular semiconductor firms, shined after report of Beijing’s latest chip push.

** The CSI all share semiconductors & semiconductor equipment index jumps 8.6%, with top chipmaker Semiconductor International Manufacturing Corp ending up 7.5% in Shanghai.

** Vice Premier Liu He, China’s economic czar, has been tapped to spearhead the development of so-called third-generation chip production and lead the formulation of policy support for the technology, Bloomberg News reported.

** Though concerns over domestic valuations remained a focal point for investors.

** “The root cause for the recent correction was high valuations, as many Chinese institutional investors switched out of expensive stocks to prepare for a year-end ranking,” said Dong Baozhen, chairman of Beijing-based private securities fund Lingtong Shengtai Investment Management.

** “There is co-existence of extremely high valuations and extremely low valuations in the A-share market, which needs to be corrected,” he said. (Reporting by Luoyan Liu and Andrew Galbraith)

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