China stocks rose on Monday on possible restructuring among major shipping firms and in other key sectors.
China stocks rose on Monday on possible restructuring among major shipping firms and in other key sectors, and on hopes that less volatile trading may soon convince fund managers to get off the sidelines and put billions in cash back to work.
Mainland markets brushed off gloomy data at the weekend on trade and inflation, which reinforced expectations that Beijing will need to roll out more support measures for the economy.
“Mainland investors were digesting the excitement from last week as ample funds are waiting to re-enter the market,” said Steven Leung, a director at UOB Kay Hian in Hong Kong.
“The anticipation of better earnings outlook following restructuring of industries one-by-one aided buying interest,” Leung added.
The CSI300 index rose 2.9 percent to 4,018.87 points by the end of the morning session, while the Shanghai Composite Index gained 3.2 percent to 3,864.10 points.
China CSI300 stock index futures for August rose 3.6 percent, to 3,993.2, 25.67 points below the current value of the underlying index.
Trading in some major shipping stocks, including China Shipping Development, China Shipping Container Lines and China COSCO Holdings, was suspended on Monday pending announcements, adding to speculation they may be merged.
Shipping, railway and cement counters were the main outperformers last week, driven mainly by expectations of policy support, GF Securities Research said in note on Monday.
Close to 300 China funds that oversee more than 1 trillion yuan ($161 billion) are waiting to enter the stock markets at any time, the Shanghai Securities News reported on Friday, in the latest attempt by state media to coax investors back into the market after its recent 25-percent rout.
CSI Real Estate sub-index rose more than 3 percent after China’s top economic planner said the property market was likely to continue to improve in the second half of this year.
The CSI energy sub-index climbed nearly 4 percent.
China’s weak economic data drew more concern in Hong Kong, where the Hang Seng index dropped 0.3 percent to 24,477.62 points.
The Hong Kong China Enterprises Index gained 0.3 percent, to 11,266.28.
China data on industrial output, retail sales, bank loans and investment are due later this week.
The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 138.15.
A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
Under the Hong Kong-Shanghai Stock Connect scheme , a net 0.06 billion yuan went northbound to Shanghai, a tiny fraction of the 13 billion yuan daily quota.
Total volume of A shares traded in Shanghai was 26.47 billion shares, while Shenzhen volume was 17.01 billion shares.
Total trading volume of companies included in the HSI index was 0.6 billion shares.