Local index rises 1.77% on PMI data
Print Edition
SHANGHAI stocks climbed the most in a week yesterday, helping the index regain the 2,000-point level, after China reported a surprising rise in manufacturing and the government vowed to boost domestic demand to support economic growth.
The Shanghai Composite Index gained for a third straight day, adding 1.77 percent to close at 2,029.07 points.
China’s official Purchasing Managers’ Index, a gauge of manufacturing activity slanted toward state-owned enterprises, increased to 50.3 in July, according to the National Bureau of Statistics.
The figure represents a slight gain from 50.1 in June and is higher than market expectations of 49.8. A reading of 50 or higher indicates activity is expanding.
Zhao Qinghe, a senior statistician at the bureau, said the rebound in July’s PMI was largely due to a recovery in business confidence after the government unveiled a raft of measures to stabilize growth and promote restructuring.
Premier Li Keqiang told a State Council meeting on Wednesday that the government would increase purchases of public services from sources outside the government and strengthen urban infrastructure construction to bolster investment and consumption, according to a statement on the government’s website.
“Recent official statements indicated the government has shifted its policy stance from a hands-off to an active approach,” China Securities said in a report yesterday. “The government is expected to take more fine-tuning measures in the following two months to stabilize growth.”
Lenders gained among financial institutions after the central bank injected 34 billion yuan (US$5.6 billion) into the banking system via 14-day reverse repurchase agreements yesterday.
China Minsheng Banking Corp rose 2.2 percent to 8.46 yuan. The Industrial Bank increased 2.3 percent to close the day at 9.27 yuan.
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