Index climbs after investors cheer gain in service PMI
By Ye Zhen |
February 5, 2013, Tuesday
|
Print Edition
Print Edition
SHANGHAI stocks edged up yesterday as investors cheered the rise in China's non-manufacturing activity for a fourth straight month in January, adding to signs the world's second largest economy is recovering.
The Shanghai Composite Index gained for a sixth day in a row, rising 0.38 percent to 2,428.15 points, the highest close since May 8.
The China Service Purchasing Managers Index, a gauge of business activity in non-manufacturing sectors, rose last month to 56.2 from 56.1 in December, the China Federation of Logistics and Purchasing said over the weekend. A reading above 50 signals expansion.
"The rising figure reflected the potential of domestic consumption," said Cai Jin, vice chairman of CFLP. "The sub-index of new orders received by the building sector rose to a record high, indicating investment in infrastructure will continue to grow."
Shen Minggao, chief economist for China at Citi Bank, expects the stock index to rise in the first half of this year to around 2,780 points as companies may post better-than-expected earnings.
Coal producers led gainers as CITIC Securities said in a report yesterday that demand for coking coal may improve due to increasing infrastructure construction.
Shanxi Lanhua Sci-Tech Venture Co gained 4.3 percent to 22.99 yuan (US$3.69). Shanxi Lu'an Environmental Energy Development Co surged 7.7 percent to 24.73 yuan and Yang Quan Coal Industry (Group) Co rose 3.9 percent to 16.57 yuan.
The Shanghai Composite Index gained for a sixth day in a row, rising 0.38 percent to 2,428.15 points, the highest close since May 8.
The China Service Purchasing Managers Index, a gauge of business activity in non-manufacturing sectors, rose last month to 56.2 from 56.1 in December, the China Federation of Logistics and Purchasing said over the weekend. A reading above 50 signals expansion.
"The rising figure reflected the potential of domestic consumption," said Cai Jin, vice chairman of CFLP. "The sub-index of new orders received by the building sector rose to a record high, indicating investment in infrastructure will continue to grow."
Shen Minggao, chief economist for China at Citi Bank, expects the stock index to rise in the first half of this year to around 2,780 points as companies may post better-than-expected earnings.
Coal producers led gainers as CITIC Securities said in a report yesterday that demand for coking coal may improve due to increasing infrastructure construction.
Shanxi Lanhua Sci-Tech Venture Co gained 4.3 percent to 22.99 yuan (US$3.69). Shanxi Lu'an Environmental Energy Development Co surged 7.7 percent to 24.73 yuan and Yang Quan Coal Industry (Group) Co rose 3.9 percent to 16.57 yuan.
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