Chinese shares closed firmer on Monday as China's upbeat retail sales and factory output numbers pointed to some stabilization, with second-quarter economic data meeting expectations, while technology shares rebounded from previous week's sharp declines. At the close, the Shanghai Composite index was up 0.4% at 2,942.19.
The blue-chip CSI300 index climbed 0.41%, with its financial sector sub-index ending up 0.17%, the consumer staples sector closing 0.07% higher, the real estate index down 0.11% and the healthcare sub-index up 0.35%. China's economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.
But the pace was in line with analysts' expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record, and more upbeat June factory output and retail sales offered signs of improvement. Technology firms posted the day's strongest gains, with a sub-index tracking IT companies adding 2.32%, and one tracking computer firms jumping 3.09%. Tech shares had come under pressure last week as 21 firms sought subscriptions from investors for their initial public offerings on China's new tech-heavy STAR Market, diverting market funds.
"Tech names had a challenging performance last week which in the light of today's macro data was arguably overdone," Gerry Alfonso, director at Shenwan Hongyuan Securities, said in a note. Helping to support financial market sentiment, China's central bank said it would lend 200 billion yuan to financial institutions through its one-year medium-term loan facility (MLF), rolling over a batch of MLF loans worth 188.5 billion yuan maturing Monday, and injecting an additional 11.5 billion yuan in one-year cash.
"The rollover itself underlines our view that the PBOC is there to provide liquidity when needed," said Frances Cheung, head of macro strategy at Westpac in Singapore. She noted that the additional MLF loans targeted smaller banks, which have faced difficult financing conditions in recent weeks following the regulatory takeover of a troubled regional lender. Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.29%, while Japan's Nikkei index closed 0.2% higher.
At 0716 GMT, the yuan was quoted at 6.8727 per US dollar, 0.11% firmer than the previous close of 6.8805. The largest percentage gainers in the main Shanghai Composite index were Jiangsu Chengxing Phosph-Chemical Co Ltd, up 10.05%, followed by Shanghai Wondertek Software Co Ltd, gaining 10.03% and Beken Corp, up by 10%.
The largest percentage losses in the Shanghai index were Shenyang Commercial City Co Ltd, which ended down 9.96%, followed by Angel Yeast Co Ltd, which closed 7.28% lower and Hunan Baili Engineering Sci & Tech Co Ltd, which ended down by 5.29%.
So far this year, the Shanghai stock index is up 18% and the CSI300 climbed 27%, while China's H-share index listed in Hong Kong is up 7.1%. Shanghai stocks declined 1.23% so far this month.
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