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Investors smile at a securities brokerage in Fuyang city, Anhui province, June 1, 2015. [Photo/IC] |
China stocks rose sharply on Monday, as investors took a positive view on fresh officialeconomic surveys and welcomed a chorus of domestic media commentary asserting the bullmarket has not yet ended.
The CSI300 index closed at to 5,076.18 points rising 4.86 percent, while the ShanghaiComposite Index gained 4.71 percent, to 4,828.74 points and the Shenzhen ComponentIndex gained 5.07 percent to close at 16,917.53 points.
ChiNext, a market for Chinese startups, gained 4.97 percent to 3,718.75 points.
Growth in China’s giant factory sector edged up to a six-month high in May although exportdemand continued to shrink, according to the official manufacturing Purchasing Managers’Index (PMI).
A similar official survey on the services sector showed activity cooled to its slowest rate inover five years, reinforcing views that authorities will have to roll out more stimulus in comingmonths.
“The PMI figures, both the official one and the HSBC one, were very close to the consensusview and they can be interpreted as a further normalization in the economy,” Gerry Alfonso,director of Shenwan Hongyuan Securities Co, wrote in a note.
Major state-backed newspapers, including the China Securities Journal and the ShanghaiSecurities News, carried front-page articles saying despite the market tumble on Thursday,the logic behind the bull market – monetary easing and economic restructuring – remainunchanged.
Last Thursday, both main indexes dropped more than 6 percent.
On Friday, China’s central bank said it wants to see a “healthy” stock market, as it willcontinue to expand the main board and the small-and medium boards, with plans also to setup a new board for emerging industries on the Shanghai stock exchange.
The market-friendly rhetoric emboldened investors sitting on ample cash to pile into stocks,taking advantage of relatively low valuations after Thursday’s plunge.
According to data compiled by Shanghai-based fund consultancy Z-Ben Advisors, Chinesemutual funds raised roughly 300 billion yuan ($48.42 billion) last month, 15 times more than ayear earlier, making May the best month to date for the industry in terms of fundraising.
Pharmaceutical stocks surged on Monday, as investors bet some drug makers will benefitfrom growing concern over the Middle East Respiratory Syndrome (MERS).
Banks were firmer on a report by Bloomberg that China’s Ministry of Finance may enlarge theexisting local government debt swap program by 500 billion to one trillion yuan, potentiallyimproving lenders’ asset quality.
But Ping An Insurance Group was flat, underperforming the broader market, after thebrokerage unit of Chinese financial firm Shenwan Hongyuan Group Co Ltd said it will stoplending money to clients to buy Ping An shares.
Shares in Huatai Securities Co Ltd climbed 4 percent in their Hong Kong debut on Monday,as investors bet China’s biggest broker by trading volume would continue to benefit from aboom in the country’s stock markets.
ChinaDaily