China's blue-chip index hits over 5-year high on upbeat services data, foreign inflows

China stocks climbed on Monday, with the blue-chip index hitting a more than five-year high, helped by upbeat services sector data, and robust foreign inflows on a rising yuan. ** The CSI300 index was up 0.8% at 4,881.40 by the end of the morning session, after hitting its highest since June 25, 2015.

China stocks climbed on Monday, with the blue-chip index hitting a more than five-year high, helped by upbeat services sector data, and robust foreign inflows on a rising yuan.

** The CSI300 index was up 0.8% at 4,881.40 by the end of the morning session, after hitting its highest since June 25, 2015. The Shanghai Composite Index gained 0.8% to 3,430.88. ** The tech-heavy start-up board ChiNext firmed 0.4%, while the STAR50 index added 1.1%.

** China's factory activity grew at a slower pace in August as floods across southwestern China disrupts production, but the services sector expanded at a solid rate in a boost to the economy as it continues to recover from the coronavirus shock. ** Capital Economics senior China economist Julian Evans-Pritchard said the services-sector uptick suggested an encouraging broadening out of the recovery.

** The rally in stocks also found support from robust inflows via the Stock Connect linking mainland and Hong Kong, which allows foreign investors access the country's onshore equities market. ** Investors purchased a net 6.4 billion yuan ($934.92 million) worth of China shares via the Stock Connect on Friday as the yuan strengthened to a near seven-month high, HKEX data showed.

** On Monday, investors bought a net 3.1 billion yuan worth of China stocks via the link as the yuan rose further, Refinitiv data showed. ** The consumer staples sector, long favoured by foreign investors, climbed 1.7% to its highest since 2006 launch, having gained nearly 60% so far this year.

** "The yuan's appreciation helps attract inflows from foreign investors via the Stock Connect, who will benefit from both the rise in the A-share market and the yuan's gain," said Yan Jinkui, an analyst with Caida Securities. ** Investors via the Stock Connect now play an increasingly significant role in the country's stock market, Yan noted.

** The Hang Seng index added 1.4% to 25,767.65, while the Hong Kong China Enterprises Index gained 1.3% to 10,311.89.