China’s stocks headed for the steepest weekly gain in two months after the government signaled increased support for the economy through higher spending and new measures to boost bank lending.
The Shanghai Composite Index slipped less than 0.1 percent to 2,862.25 at 10:39 a.m., paring this week’s advance to 3.4 percent. Banks led declines on Friday, while technology shares extended gains for the best performance among industry groups this week. Hong Kong’s Hang Seng China Enterprises Index fell 0.6 percent, trimming the five-day rally to 8.1 percent.
Policy makers have accelerated measures to bolster the economy after data this week showed a decline in exports and a pickup in inflation. In moves that could support lending after a record surge in new yuan loans last month, the People’s Bank of China loosened restrictions on what banks could pay on deposits and charge for loans, while the nation’s cabinet has discussed lowering the minimum ratio of provisions that banks must set aside for bad loans. Even with this week’s advance, the Shanghai gauge is the world’s worst performer this year after Greek and Italian equities, plunging 20 percent.