Index hits four-month high on robust data
By Ye Zhen |
December 15, 2012, Saturday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday soared the most in more than three years to a four-month high as robust data boosted optimism over China's economy.
The surge was also fueled by speculation that a crucial economic meeting this weekend may yield stimulus measures.
The benchmark Shanghai Composite Index jumped 4.32 percent, the biggest advance since October 2009, to 2,150.63 points, the highest close since August 10. The index gained 4.31 percent for the week, the biggest gain in 13 months.
HSBC's Flash China Purchasing Managers' Index, the earliest indicator of the nation's manufacturing activity at private and export-oriented firms, climbed for the fifth straight month to a 14-month high of 50.9 in December, up from November's 50.5, HSBC Holdings Plc said yesterday. A reading of above 50 indicates expansion.
"The data shows China's economic growth momentum is continuing, mainly bolstered by recovering domestic demand while the external environment remains weak," said Qu Hongbin, HSBC's chief economist for China.
The market also advanced ahead of this weekend's central economic work meeting, at which China's top policymakers will assess the current state of the economy and set the tone for next year's economic policies.
"Investors are betting that there will be stimulus policies following the meeting to further support the economy," said Liu Jingde, analyst with Cinda Securities.
Chu Jianfang, chief economist with Citic Securities, expects the government to maintain a prudent monetary policy while coming up with a more proactive fiscal policy next year.
"China is likely to ease the fiscal policy and spend more on financial subsidies in the coming year as it accelerates construction of projects that have been approved to bolster growth and continue tax reduction," Chu said.
Cement producers rose on hopes that accelerated infrastructure investment will fuel demand.
Anhui Conch Cement Co, China's biggest cement producer, gained 4.7 percent to 18.76 yuan (US$3). Shaanxi Qinling Cement Co surged by the daily limit of 10 percent to 5.87 yuan. Gansu Qilianshan Cement jumped 5.6 percent to close at 10.18 yuan.
The surge was also fueled by speculation that a crucial economic meeting this weekend may yield stimulus measures.
The benchmark Shanghai Composite Index jumped 4.32 percent, the biggest advance since October 2009, to 2,150.63 points, the highest close since August 10. The index gained 4.31 percent for the week, the biggest gain in 13 months.
HSBC's Flash China Purchasing Managers' Index, the earliest indicator of the nation's manufacturing activity at private and export-oriented firms, climbed for the fifth straight month to a 14-month high of 50.9 in December, up from November's 50.5, HSBC Holdings Plc said yesterday. A reading of above 50 indicates expansion.
"The data shows China's economic growth momentum is continuing, mainly bolstered by recovering domestic demand while the external environment remains weak," said Qu Hongbin, HSBC's chief economist for China.
The market also advanced ahead of this weekend's central economic work meeting, at which China's top policymakers will assess the current state of the economy and set the tone for next year's economic policies.
"Investors are betting that there will be stimulus policies following the meeting to further support the economy," said Liu Jingde, analyst with Cinda Securities.
Chu Jianfang, chief economist with Citic Securities, expects the government to maintain a prudent monetary policy while coming up with a more proactive fiscal policy next year.
"China is likely to ease the fiscal policy and spend more on financial subsidies in the coming year as it accelerates construction of projects that have been approved to bolster growth and continue tax reduction," Chu said.
Cement producers rose on hopes that accelerated infrastructure investment will fuel demand.
Anhui Conch Cement Co, China's biggest cement producer, gained 4.7 percent to 18.76 yuan (US$3). Shaanxi Qinling Cement Co surged by the daily limit of 10 percent to 5.87 yuan. Gansu Qilianshan Cement jumped 5.6 percent to close at 10.18 yuan.
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