Shanghai’s benchmark stock index rises to a 12-month high, buoyed by an unexpected pickup in China’s services industry
- Shanghai’s Composite Index rose 1.2 per cent to 3,216.30, the first time it had crossed the 3,200 level since May 2018
- Hong Kong’s Hang Seng Index rose for the seventh day, advancing 1.2 per cent to 29,986.39, the highest since June 2018
China stocks climbed to a 12-month high on Wednesday, extending a four-day rally as early doubts succumbed to strong signals of economic recovery and trade negotiation progress.
The Shanghai Composite Index advanced 1.2 per cent to 3,216.30, the highest level since March 22 last year. This was also the benchmark’s first breach of the 3,200 level since May 2018.
Sentiments were buoyed following a surprisingly good reading of the Caixin/Markit Services Purchasing Managers’ Index (PMI), which indicated a pick up in China’s services sector. The index climbed to a 14-month high of 54.4 in March, far exceeding the market expectation of 52.3.
“We expect the services sector to continue to show signs of recovery in the upcoming months, as fiscal policy easing provides more support for the private sector,” said HSBC’s economist Chen Jingyang, in a research note after Caixin’s Services PMI was released. “This should further support economic activity and boost business confidence.”
Meanwhile, White House economic adviser Larry Kudlow said overnight that the US and China “expect to make more headway” in trade talks this week, according to Reuters.
