China stocks close at 7-month highs on stimulus hopes

An investor watches an electronic board showing stock information at a brokerage office in Nanjing, Jiangsu province, Aug 15, 2016.[Photo/IC]

SHANGHAI - China stocks jumped to their highest in more than seven months on Monday, led by property and financial shares, as investors bet that disappointing economic data for July would prod Beijing to unleash fresh stimulus.

The blue-chip CSI300 index jumped 3.0 percent to 3,393.42 points, while the Shanghai Composite Index gained 2.4 percent to 3,125.20 points.

Both indexes hit levels not seen since early January.

The Shenzhen index closed 2.79 percent higher at 10,822.11 points. The ChiNext Index, tracking China's NASDAQ-style board of growth enterprises, was up 3.27 percent to close at 2,193.21 points.

China reported weaker-than-expected investment, lending, retail spending and factory output data on Friday, on top of weak trade numbers, keeping alive hopes the government will roll out more support measures this year to meet its economic growth targets.

"In light of persistent headwinds from the external sector, weak business sentiment, and a cooling property market, we believe that policymakers need to accelerate policy easing and reforms," Jing Li, an economist at HSBC, wrote in a note.

Real estate stocks gapped higher at the open and ended 7.3 percent higher, extending Friday's sharp gains. The sector index has now surged some 24 percent so far this month.

Bellwether developer Vanke jumped its 10 percent daily limit.

The banking sector also jumped on easing hopes, while brokerage shares posted robust gains on expectations that China will launch a?program soon to connect the Shenzhen and Hong Kong stock markets and boost cross-border trade.