BEIJING: China stocks closed higher on Wednesday, with banking and manufacturing shares leading the gains, as upbeat industrial data suggested a sustained recovery while the manufacturing sector rapidly emerged from its COVID-19 slump.

At the close, the Shanghai Composite index was up 0.11% at 3,573.34, shrugging off concerns that policy makers would shift to a tighter stance to cool gains in share prices.

Official data on Wednesday showed that profits at China’s industrial firms grew for the eighth straight month in December. The Asian country is the only major economy in the world to avoid a contraction in 2020, with gross domestic product up 2.3% for the full year, while many countries remain crippled by the pandemic.

The blue-chip CSI300 index was up 0.27%, with its banking sector sub-index higher by 1.41%, and the industrial sub-index jumped by 2.07%.

The smaller Shenzhen index ended 0.19% firmer and the start-up board ChiNext Composite index was higher by 0.696%.

The resurgence of coronavirus cases and travel restrictions in the mainland will delay the exit of stimulus measures, and the central bank is expected to ensure ample market liquidity before the Lunar New Year holiday, said Wendy Liu, UBS’ head of China strategy.

Yi Gang, the governor of the People’s Bank of China (PBOC), also said on Tuesday that China will not exit from supporting policy prematurely. The central bank has rolled out a raft of measures, including cuts in interest rates and reserve ratios since early-2020 to support the virus-hit economy, but it has shifted to a steadier stance in recent months as the recovery solidified.