China stocks rally on stimulus hopes

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Asian stocks held their ground on Wednesday as Chinese equities soared on stimulus hopes, although a resurgence in regional tensions capped broader gains with North Korea opting to restore part of a missile test site it had began dismantling earlier.

The Shanghai Composite Index was up one per cent, hovering near a nine-month high as China’s state planner said the government will boost domestic consumption further this year.

Beijing announced billions of dollars in tax cuts and infrastructure spending on Tuesday to reduce the risk of a sharper economic slowdown.

Hong Kong’s Hang Seng added 0.2 per cent and Australian stocks advanced 0.7 per cent as mining stocks climbed on the prospect of increased Chinese stimulus.

Some of the region’s other equity markets, however, under performed.

South Korea’s KOSPI was down 0.3 per cent following news that North Korea had restored part of a missile test site, with U.S. President Donald Trump’s national security advisor John Bolton warning that new sanctions could be introduced if Pyongyang did not scrap its nuclear weapons programme.

Japan’s Nikkei lost 0.7 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.1 per cent.

Robust U.S. economic data supported the dollar, but its Australian counterpart slid after data showed the economy slowed to a near standstill in the fourth quarter.

Suzan O