Shanghai stocks flat amid lackluster PMI data

Shanghai stocks were little changed today as Caixin PMI data showed that China's manufacturing production increased at the softest rate since June.

Shanghai stocks were little changed today as Caixin PMI data showed that China’s manufacturing production increased at the softest rate since June.

The Shanghai Composite Index edged up 0.08 percent to close at 3,395.91 points.

The Caixin China General Manufacturing Purchasing Managers’ Index was 51.0 in October, which remains unchanged compared with that in September. The index stood above 50, indicating expansion in manufacturing last month. A reading below 50 reflects a contraction.

“New orders rose at a slightly quicker pace, while production increased at the softest rate in four months (since June). At the same time, companies continued to lay off staff amid reports of company-downsizing policies and efforts to raise efficiency,” Caixin said in its report today.

“The rate of expansion picked up slightly since September, but remained moderate overall. New export sales rose at a similarly modest pace,” according to Caixin.

The Caixin report follows the similar official survey on Tuesday which pointed out that China’s manufacturing activities softened in October compared with September. The official index stood at 51.6 in October, moderating from 52.4 in September, according to the data released by the National Bureau of Statistics.

Zhao Qinghe, statistician with National Statistics Bureau said that manufacturing production and growth of market demand slowed in October because of the week-long National Day holiday. Also, activities in high-energy consumption and heavy pollution industries slowed in October.

Investors turned optimistic after the People’s Bank of China injected 240 billion yuan (US$36.3 billion) into the financial market via reverse repurchase agreements today, according to a statement published on its official website.

Infrastructure companies, telecommunications, liquor makers, iron and steel providers are among the biggest gainers today.

Ping An Securities Co said in a note that telecommunications, pharmaceutical and computer sectors are expected to perform well in the fourth quarter and next year with greater investment opportunities because of business performance and government’s policy.

Shanghai Sunglow Packaging Technology Co Ltd rose 5.22 percent to 39.94 yuan (US$6.03), China Life Insurance Co Ltd climbed 4.71 percent to 32.88 yuan and Zhejiang Hisun Pharmaceutical Co Ltd added 3.37 percent to 15.04 yuan.

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