Manufacturing sector growth puts spring in investors' step

08:43, December 02, 2010      

Email | Print | Subscribe | Comments | Forum 

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.

Manufacturing growth may not boost stocks as the "good" economic data could persuade policymakers to further tighten monetary policy to fight inflation, Ting Lu, economist at Bank of America-Merrill Lynch, said in a report to clients.

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.

Source:China Daily


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion