China stocks inch up triggered by infrastructure plays

China stocks have traded sideways on Friday but managed to close the session slightly up, as strength in infrastructure shares offset concerns rooted in continuing yuan weakness.

The blue-chip CSI300 index rose 0.3 percent, to 3,327.80 points, while the Shanghai Composite Index gained 0.2 percent, to 3,091.29 points.

For the week, CSI300 was up 0.7 percent, while SSEC gained 0.9 percent.

Infrastructure-related stocks rose sharply, after China issued rules for management of government funds used in private-public partnership (PPP) projects, many of which are for infrastructure work.

The sector was also helped by improving ties between China and Philippines, which bodes well for Beijing’s strategy to win construction work in other countries.

That helped offset drags from the real estate sector, as well as negative impact from a weakening yuan.

China’s yuan slipped against the dollar on Friday to a fresh six-year low, as strong dollar purchases by companies continued piling pressure on the Chinese currency.

Bucking Friday’s trend, construction stocks including China Communications Construction, Power Construction Corp of China and China Railway Construction rose sharply.

 Source: Reuters