BEIJING: China’s benchmark stock index rose to the highest level since March 2008 after government data showed manufacturing unexpectedly expanding.
XJ Electric Co. and China Communications Construction Co. led a rally for industrial companies with gains of more than 4 percent. The official Purchasing Managers’ Index climbed to 50.1 in March, exceeding the estimate of 49.7 and February’s 49.9, while HSBC Holdings Plc and Markit Economics’ manufacturing PMI surpassed analysts’ forecasts. China Construction Bank Corp. paced gains for lenders after the government announced plans to start an insurance system for bank deposits in May.
The Shanghai Composite Index rose 1.4 percent to 3,799.85 at the 11:30 a.m. break, while Hong Kong’s Hang Seng China Enterprises Index added 1.6 percent. The rebound for the official factory gauge suggests stimulus efforts have started to bolster factories in the world’s second-largest economy.
“Certainly the PMI helped,” said Daphne Roth, head of Asian equity research at ABN Amro Bank NV in Singapore. “Capital market reform is ongoing and the government has the flexibility to boost the market. We still like China despite its outperformance. You can’t have the market going one way up and we will see volatility along the way.”
