China, HK bourses lifted by factory data
HONG Kong shares closed 0.63 per cent higher yesterday, while Shanghai surged almost five per cent after official data indicated a pick-up in Chinese manufacturing activity last month.
The benchmark Hang Seng Index added 172.97 points to 27,597.16 on turnover of HK$164.84 billion (S$28.7 billion).
China's official Purchasing Managers' Index (PMI) came in at 50.2 for last month, up from 50.1 in April and the strongest since 50.3 in November.
The figures were welcomed by traders as a sign the world's No. 2 economy could be starting to feel the effects of stimulus moves by Beijing, including three interest rate cuts since November.
Despite the pick-up, casino chips took a beating in Hong Kong after neighbouring Macau's Gaming Inspection and Coordination Bureau said gross casino revenue for the city plunged 37.1 per cent last month, a 12th straight fall.
The report is the latest to indicate that a corruption crackdown by the Chinese authorities is hammering the world's top gaming hub. The fall comes despite the opening of two new casino-hotels by Galaxy Entertainment.
However, while the figures are worrying for the city, Karen Tang, a Hong Kong-based analyst at Deutsche Bank, said the outlook was not too bad.
"The market believes in 'supply creates demand' and consensus still forecasts a Macau recovery next year," wrote Ms Tang.
In mainland China, the benchmark Shanghai Composite Index surged 4.71 per cent, or 217.00 points, to end at 4,828.74 on turnover of 934.5 billion yuan (S$203.8 billion).
The Shenzhen Composite Index, which tracks stocks on China's second exchange, gained 4.79 per cent, or 133.71 points, to 2,926.96 on turnover of 829.9 billion yuan.
"The stabilisation of the economy indicated by the PMI data has helped sentiment," Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management, told Bloomberg News.
"The stock market has consolidated and is likely to grow at a slower pace rather than just straight up," he said.
Shanghai plunged 6.5 per cent on Thursday due to concerns over stricter requirements by securities firms for margin trading, through which investors borrow money to trade stocks.
In a report released on Friday, China's central bank said it would continue to promote stable and healthy development of the stock market, as it looks to strengthen the role of the financial markets to stabilise economic growth.
"The central bank's report has boosted investors' confidence in the stock market. The central bank's stance of wishing for steady and upward momentum for the stock market also represents the voice of the market regulator," said Central China Securities strategist Zhang Gang.