Chinese shares close higher on upbeat manufacturing data

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Chinese shares close higher on upbeat manufacturing data

(Xinhua) 19:09, September 23, 2013

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Chinese shares closed higher on Monday after the HSBC Flash Purchasing Managers' Index (PMI) for September hit a six-month high.

The benchmark Shanghai Composite Index went up 1.33 percent, or 29.19 points, to finish at 2,221.04, and the Shenzhen Component Index rose 2.81 percent, or 238.54 points, to finish at 8,719.29.

Combined turnover on the two bourses expanded to 239.4 billion yuan (39.12 billion U.S. dollars) from 194.06 billion yuan the previous trading day.

The Flash PMI reading of 51.2 for September improved from August's 50.1, marking the highest level since April. A figure above 50 signals expansion, while below 50 indicates contraction.

HSBC's chief economist for China, Qu Hongbin, said the September reading added further evidence to China's ongoing growth rebound.

"The firmer footing was supported by simultaneous improvements of external and domestic demand conditions," Qu said, adding the bank expects a more sustained recovery as the further filtering-through of fine-tuning measures should lift domestic demand.

Shares related to the pilot Shanghai free trade zone (FTZ) led Monday's gains. Shanghai Waigaoqiao Free Trade Zone Development Co. Ltd and Shanghai Jinqiao Export Processing Zone Development Co. Ltd both rose by the daily limit of 10 percent to 53.03 yuan and 15.52 yuan per share, respectively.

The pilot Shanghai FTZ is expected to be a test bed for pushing forward financial and economic reforms in China.

Media and entertainment companies, the printing and packaging sector as well as the electronic information firms were also among the top performers.

The rally in Chinese stocks was also a delayed response to the Federal Reserve's announcement about a postponement in unwinding its stimulus.

The Fed last Wednesday surprised markets by delaying the long-debated tapering of its current monthly 85-billion-U.S. dollar bond purchase program, citing concerns over tighter financial conditions and fiscal headwinds.

While many financial markets rose after the news, Chinese stock markets were silent as they were closed last Thursday and Friday for the Mid-Autumn Festival.

The ChiNext Index, tracking China's NASDAQ-style board of growth enterprises, rose 2.83 percent to close at 1,326.09 points on Monday.