SHANGHAI stocks rallied this morning on China's strengthening manufacturing sector, renewing investor confidence as the regulator announced new measures during the holiday to bolster the stock market.
The Shanghai Composite Index jumped 1.58 percent, or 37.78 points to 2,434.09, the highest in seven weeks. Turnover stood at 67.8 billion yuan (US$10.7 billion) by the noon break.
China's manufacturing activities continued to improve in April, indicating a rebound in economic growth from the first quarter.
HSBC Holdings Plc and Markit Economics today posted the final reading of the Purchasing Managers Index in April at 49.3. It compared with a preliminary reading of 49.1 reported last week, and up from March's final 48.3. A number below 50 means a contraction in manufacturing.
The official PMI rose for a fifth month to 53.3, the highest this year, from 53.1 in March, the China Federation of Logistics and Purchasing said yesterday.
The HSBC China PMI is geared more towards private and export-oriented companies while the official PMI is slanted towards large state-owned enterprises, and has double the sample size - 800 companies - compared to the private reading.
Coal and metal producers led the gains on possible rising demand due to an improved economic outlook.
China Shenhua Energy Co, the nation's largest coal producer, jumped 2.9 percent to 27.67 yuan. Yanzhou Coal Mining Co rallied 5.7 percent to 25.15 yuan.
Jiangxi Copper Co, China's biggest producer of the metal, soared 9.4 percent to 28.5 yuan. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co, the biggest producer of rare earths, surged 7.1 percent to 76.02 yuan.
The China Securities Regulatory Commission recently announced a series of measures to bolster the stock market. Trading commissions for all futures products were lowered by 30 percent on average, followed by a 25 percent cut for A-share trading fees in general, according to the regulator's statements on its website.
Analysts said a series of moves, including lower fees, mandatory dividend payouts, improved delisting rules, and IPO reforms are to protect investors.
Brokerages benefited from the renewed market confidence and advanced 3.7 percent on average by the noon break. Haitong Securities Co jumped 2.6 percent to 10.15 yuan. Citic Securities Co gained 2 percent to 13.26 yuan. China Merchants Securities Co surged 3.3 percent to 13.29 yuan.
Source:shanghaidaily