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Shanghai stocks rally amid hopes for policy easing
By Ye Zhen |
September 3, 2012, Monday
|
Online Edition
Online Edition
SHANGHAI stocks advanced this morning on speculation the government may step up monetary easing as China's manufacturing activity shrank at a faster pace in August.
The key Shanghai Composite Index gained 0.8 percent, or 16.40 points, to 2,063.92 points. Turnover was 25.3 billion yuan (US$4 billion) by the noon break.
HSBC's China Purchasing Managers' Index, a gauge of manufacturing activity slanted more towards private and export-oriented firms, fell in August to 47.6, the lowest in 41 months, down from July's reading of 49.3, HSBC Holdings PLC announced today.
A reading below 50 means contraction while a reading above 50 indicates expansion.
China's official Purchasing Managers' Index for August also dropped to 49.2, below 50 for the first time since last November, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Saturday.
The central government should relax its monetary policy to stabilize economic growth and employment and there is enough leeway to policy easing, said Qu Hongbin, chief economist for China at HSBC Holdings Plc. He expects another interest rate cut and as much as 200 basis points cut in reserve requirement ratio by the end of this year.
Property developers led the market gain after Premier Wen Jiabao stressed increased supply of affordable homes. Poly Real Estate, the country's second largest developer, jumped 6.2 percent to 9.99 yuan. Gemdale Corporation increased 4.2 percent to 5.23 yuan.
Oil stocks were bullish on speculation the government will raise the retail prices of refined oils as international oil prices have gone up. China Oilfield Services Limited rose 1.4 percent to 16.41 yuan. Offshore Oil Engineering Co added 1.1 percent to 5.66 yuan.
Gold stocks also gained. Zijin Mining Group Co, China's largest gold producer, rose 2.2 percent to 3.76 yuan. Shandong Gold Mining Co surged 6.7 percent to 35.76 yuan. Zhongjin Gold Corp jumped 5.6 percent to 14.87 yuan.
The key Shanghai Composite Index gained 0.8 percent, or 16.40 points, to 2,063.92 points. Turnover was 25.3 billion yuan (US$4 billion) by the noon break.
HSBC's China Purchasing Managers' Index, a gauge of manufacturing activity slanted more towards private and export-oriented firms, fell in August to 47.6, the lowest in 41 months, down from July's reading of 49.3, HSBC Holdings PLC announced today.
A reading below 50 means contraction while a reading above 50 indicates expansion.
China's official Purchasing Managers' Index for August also dropped to 49.2, below 50 for the first time since last November, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Saturday.
The central government should relax its monetary policy to stabilize economic growth and employment and there is enough leeway to policy easing, said Qu Hongbin, chief economist for China at HSBC Holdings Plc. He expects another interest rate cut and as much as 200 basis points cut in reserve requirement ratio by the end of this year.
Property developers led the market gain after Premier Wen Jiabao stressed increased supply of affordable homes. Poly Real Estate, the country's second largest developer, jumped 6.2 percent to 9.99 yuan. Gemdale Corporation increased 4.2 percent to 5.23 yuan.
Oil stocks were bullish on speculation the government will raise the retail prices of refined oils as international oil prices have gone up. China Oilfield Services Limited rose 1.4 percent to 16.41 yuan. Offshore Oil Engineering Co added 1.1 percent to 5.66 yuan.
Gold stocks also gained. Zijin Mining Group Co, China's largest gold producer, rose 2.2 percent to 3.76 yuan. Shandong Gold Mining Co surged 6.7 percent to 35.76 yuan. Zhongjin Gold Corp jumped 5.6 percent to 14.87 yuan.
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