Markets
Manufacturing sector growth puts spring in investors' step
By Irene Shen (China Daily)
Updated: 2010-12-02 09:30
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| An investor watches share price movements at a brokerage in Shanghai. On Wednesday, mainland stocks rose for the first time in four days as faster-than-estimated manufacturing growth signaled tightening policies haven't curbed economic growth.[Photo/China Daily] |
SHANGHAI - Mainland stocks rose for the first time in four days as faster-than-estimated manufacturing growth signaled tightening policies haven't curbed economic growth.
Huaneng Power International Inc surged the most in six weeks, leading gains for electricity producers, after the Purchasing Managers' Index (PMI) rose to 55.2 in November from 54.7 in October. China Vanke Co rose 1.11 percent as home prices rebounded. Harbin Pharmaceutical Group Co and Shanghai Fosun Pharmaceutical (Group) Co paced declines for healthcare stocks on speculation cuts in drug prices may hurt earnings.
"The manufacturing number shows the economy is still healthy," said Deng Changrong, a strategist at Huaxi Securities Co in Shenzhen.
The Shanghai Composite Index climbed 0.12 percent to 2823.45 at the 3 pm close on Wednesday, with 482 stocks gaining and 380 declining. The CSI 300 Index was little changed at 3136.02.
Mainland manufacturing grew at the fastest pace in seven months in November, indicating the economy can withstand higher interest rates as price pressures escalate. The PMI figure was more than the 54.8 median estimate of 14 economists surveyed by Bloomberg News.
China Yangtze Power Co, the nation's biggest hydro dam operator, advanced 2.11 percent to 7.73 yuan ($1.16) on Wednesday.
Vanke, the nation's largest developer, added 1.11 percent to 8.22 yuan. Poly Real Estate Group Co, the second biggest, increased 0.91 percent to 12.23 yuan. Home prices in 100 Chinese cities rose 0.8 percent in November from a month earlier, SouFun Holdings Ltd said.
Industrial and Commercial Bank of China Ltd increased 2.14 percent to 4.29 yuan, the first gain in six days. China Construction Bank Corp rose 1.73 percent to 4.70 yuan.
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The People's Bank of China raised lenders' reserve requirements for the fifth time this year on Nov 19, a month after increasing its benchmark interest rate for the first time since 2007. Consumer prices in October were 4.4 percent higher than a year earlier. The government's full-year inflation target is 3 percent.
Two-year contracts that exchange the central bank's one-year deposit rate for a fixed payment climbed 58 basis points to 3.4 percent, the biggest monthly advance since April 2007, according to data compiled by Bloomberg. Over the past two months Standard Chartered Plc and Credit Agricole SA doubled projections for the number of increases in the deposit rate by mid-2011 to four.
A gauge tracking healthcare companies on the CSI 300 extended declines, falling 1.7 percent, the most among the 10 industry groups.
Bloomberg News