The Star online (08/01/2020) - SHANGHAI: Investors are piling into China’s markets, encouraged by progress on trade and signs that the world’s second-largest economy may be stabilising.

Improving confidence helped stoke a 0.5% rally in the yuan on Tuesday, pushing it to its strongest level since early August.

The currency punched past the key 6.95-per-dollar level, and traded on the strong side of its 200-day moving average for the first time since May.

The CSI 300 Index of stocks closed at an almost two-year high as volume jumped.

The return of risk appetite in China comes amid growing optimism that Beijing and Washington may sign an initial deal on trade as soon as next week.

Momentum is also improving in China’s economy, with recent data showing that a recovery in the nation’s manufacturing sector continued in December.

“Risk sentiment is strong onshore, ” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. “There are signs of bottoming out in the economy and a more flexible monetary policy.” — Bloomberg