China Manufacturing Expansion Lifts Asia Indexes

Devan Biswas
01 Nov, 2010
New York City

Stocks in Hong Kong and mainland China surged after the latest manufacturing report indicated sustained expansion. However, input prices gained at the fastest pace in October among all other sub indexes tracked. Resource stocks and banks led the gained. China Construction Bank Corp said net increased 31%.

[R]5:00 PM Hong Kong – Stocks in Hong Kong and mainland China surged after the latest manufacturing report indicated sustained expansion. However, input prices gained at the fastest pace in October among all other sub indexes tracked. Resource stocks and banks led the gained. China Construction Bank Corp said net increased 31%.[/R]

Markets in Asia and China gained sharply on the back of positive data on manufacturing.

Manufacturing index tracked by China Federation of Logistics and Purchase and National Bureau of Statistics increased to 54.7 in October from 53.8 in September.

Another index tracked by HSBC Holdings Plc and Markit Economics increased to 54.8 from 52.9.

The purchasing managers’ index, widely known as PMI showed a sustained manufacturing growth as exports rebound and construction activities stay robust.

Shanghai Composite Index increased 2.5% to 3,054.21 and the CSI 300 index increased 2.8% to 3,473. Hang Seng index added 2.4% to close at 23,652.90.

The sub indexes tracking from input prices to new orders to exports showed the largest increase in input price inflation. The price index increased to 69.9 from 65.3 and the growth in exports declined fractionally but still expanded in the month.

Stocks in trading surged sharply on the back of manufacturing report. Resource and steelmakers led the gainers followed by banks.

China Shenuha Energy gained 3.4% to close at 29.57 yuan and Yahzhou Coal Mining Co. closed up daily limit of 10% to 32.21 yuan. Jiangxi Copper soared 5.7% to 46.27 yuan.

China Construction Bank Corp gained 2.3% to 5.16 yuan after it reported better than expected profit. And, privately controlled China Minsheng Banking Corp added 1.1% after quarterly net increased 46%.

China Construction Bank closed near 3-year high after quarterly earnings rose 31% to 39.8 billion yuan and may raise less than 75 billion yuan as filed earlier. The bank’s profit is the latest in a string of rising profits from other banks.

China Merchants Bank Co and China Citic Bank Corp reported net increase of more than 52%.