China's blue-chip CSI300 index on Tuesday rose seventh straight day to strike an 11-month high, with big-cap industry leaders easily outperforming growth stocks. The blue-chip CSI300 index rose 0.8 percent, to 3,564.04 points, while the Shanghai Composite Index gained 0.2 percent to 3,282.92 points. Investors were encouraged by more signs that China's economy is stabilizing, with a Reuters poll showing manufacturing sector activity likely held onto a modest expansionary trend this month.
"The markets are now fixated with companies with good cash flow performance," said Ren Chengde said, a Shanghai-based senior analyst at Galaxy Securities. "More cash means more dividends." He said insurers were snapping up industrial companies for the sake of higher dividends.
Chinese financial conglomerate Anbang Insurance Group's high-profile move to increase its stake in China State Construction Engineering from 10 percent have sent the company's share price soaring, fuelling frenzied buying in undervalued industry-leading blue-chips. China State Construction's stock jumped 8.1 percent on the day and is up more than 50 percent since early this month.
Anbang has said it plans to buy up to 3.5 billion more shares in the company over the next 12 months. Sectors were mixed, with big-cap blue-chips far outperforming lacklustre growth stocks. Gains were led by consumer and infrastructure stocks , while resources stocks fell due to weaker oil prices and metals retreating from highs. Fresh home purchase curbs dampened investors' appetite for properties, after China's Tianjin and Shanghai introduced new measures to cool the frothy market.