Raft of good economic news boosts China markets

Fresh official data showed better-than-expected economic growth and increased industrial production and retail sales in Q1, as well as strong growth in pork prices likely in H2.

China's markets extended their gains on Wednesday, led by agricultural and rural stocks, with sentiment boosted by a string of positive first quarter economic data. 

The Shanghai Composite Index inched up 0.29 percent, or 9.52 points, to finish at 3,263.12 points after a day of fluctuations.

The Shenzhen Component Index gained 0.55 percent to end at 10,344.43 points and the ChiNext Index surged 1.17 percent to close at 1,717.44 points.

Combined turnover on the two bourses increased to 830.1 billion yuan (US$123.7 billion) from 775.7 billion yuan on Tuesday.

Data released on Wednesday showed the world's second-largest economy grew 6.4 percent year on year in the first quarter, compared with a Reuters poll forecast of 6.3 percent; industrial production and retail sales jumped 8.5 percent and 8.7 percent respectively, according to the National Bureau of Statistics. 

Following the anticipation from the Ministry of Agriculture and Rural Affairs that pork price was quite likely to have a big rise during the second half of 2019 due to seasonal factors, relevant companies saw broadly-based gains. Shares of pig feed company Shenzhen Kingsino Technology Co Ltd rose by the daily 10 percent cap to close at 13.79 yuan.

Automakers and electrical equipment manufacturers were also among Wednesday's big gainers.

Analysts attributed the improvements partly to Beijing’s stimulus measures.

Despite these positive data, a spokesman from the National Bureau of Statistics warned that China’s development still faces downward pressure “from the external environment.”

The Shanghai composite index has increased 30 percent this year, and Shenzhen more than 40 percent.

Zhang Yidong, chief strategist at Industrial Securities, said economic fundamentals would be the key factor influencing the A-share markets this month.

He advised investors to focus on financials, tech giants and consumption-related stocks.

And as the real economy is showing signs of recovery, industry leaders in areas such as chemical, non-ferrous metals, coal and steel are expected to post better performances, Zhang said.

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