Chinese stocks zoom high amid optimism led by factory data

Chinese shares edged higher on Tuesday in a choppy morning session, with the benchmark equity index hitting a more than 10-month high, as investors continued to take heart from a rebound in manufacturing data and hopes for policy easing.

At the midday break, the Shanghai Composite index was up 0.41 per cent at 3,183.31 points. It had earlier risen as much as 0.56 per cent, hitting its highest level since May 23, 2018. China's blue-chip CSI300 index was up 0.11 per cent, having earlier touched a one-year high, with its financial sector sub-index rising 0.47 per cent. But the real estate index fell 0.26 per cent and the healthcare sub-index lost 1.1 per cent.

Chinese A-shares have been supported by a number of factors, including stronger manufacturing data released Monday, an improved outlook for U.S.-China trade talks and credit growth, abundant liquidity, and investors' expectations of an imminent cut to banks' reserve requirement ratios, Gao Ting, head of China Strategy at UBS Securities, said in a note. Consumer staples firms fell 1.77 per cent, with shares in China's leading liquor makers dropping as foreigners dumped shares through the Stock Connect programme.

Chinese H-shares listed in Hong Kong rose 0.11 per cent to 11,570.86, while the Hang Seng Index was up 0.09 per cent at 29,590.05. The smaller Shenzhen index was up 0.67 per cent and the start-up board ChiNext Composite index was higher by 0.49 per cent.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.13 per cent while Japan's Nikkei index was up 0.14 per cent. The yuan was quoted at 6.721 per U.S. dollar, 0.13 per cent weaker than the previous close of 6.7125. The largest percentage gainers in the main Shanghai Composite index were AVIC Capital Co Ltd, up 10.08 per cent, followed by Asian Star Anchor Chain Co Ltd Jiangsu, gaining 10.04 per cent and Sinopec Oilfield Service Corp, up by 10.04 per cent.

The largest percentage losses in the Shanghai index were Hangzhou TianMuShan Pharmaceutical Enterprise Co Ltd, down 9.99 per cent, followed by Nanjing Xinjiekou Department Store Co Ltd, losing 5.4 per cent and Zhejiang Jiecang Linear Motion Technology Co Ltd, down by 3.67 per cent. So far this year, the Shanghai stock index is up 27.12 per cent, while China's H-share index is up 14.2 per cent. Shanghai stocks have risen 2.58 per cent this month.

The top gainers among H-shares were China Tower Corp Ltd, up 2.7 per cent, followed by Haitong Securities Co Ltd, gaining 2.65 per cent and Huaneng Power International Inc, up by 2.64 per cent. The three biggest H-shares percentage decliners were Guangzhou Automobile Group Co Ltd, which has fallen 4.14 per cent, Shenzhou International Group Holdings Ltd, which has lost 1.8 per cent and CNOOC Ltd, down by 1.7 per cent.

In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dipped 0.6 per cent while the IT sector rose 0.5 per cent. The top gainer on the Hang Seng was Galaxy Entertainment Group Ltd, up 3.62 per cent, while the biggest loser was Sino Land Co Ltd, which was down 2.07 per cent.