China, Hong Kong stocks climb on upbeat manufacturing data, stimulus bets

• HONG KONG: China and Hong Kong stocks gained on Monday, driven by encouraging manufacturing data and expectations of continued policy support from Beijing.**

Chinese stocks post monthly gain on hopes of better Beijing data

• At the midday break, the Shanghai Composite index jumped 1.02% at 3,360.38 points, adding to November’s 1.4% gain.

• China’s blue-chip CSI300 index was up 0.7%, with auto sector gaining 3.45%. The real estate index added 1.51%, while the healthcare sub-index climbed 0.75%.

• Hong Kong’s benchmark Hang Seng Index rose 0.23% to 19,468.27.

• Sentiment was buoyed by data that showed China’s factory activity expanded last month, with Beijing’s stimulus blitz since September starting to trickle through just as Donald Trump ramps up trade threats.

• The Caixin/S&P Global manufacturing PMI rose from October’s 50.3 to 51.5 in November, the highest since June and beating analysts’ forecasts of 50.5 in a Reuters poll. The print echoed an official survey, which put the figures at a seven-month high, on Saturday.

• “Economic momentum clearly improved on the policy support and front-loaded export,” Citi analysts said.

• Domestic policy support would be essential once external headwinds start to phase in and monetary and fiscal policies would stay supportive with a focus on consumption, they added.

• Some long-only investors are now more short-term focused than usual, keeping an eye on policy direction from CEWC and hoping for more supportive measures to come, Bank of America strategists said.

• China’s 10-year government bond yield slipped below the 2% floor to the lowest since April 2002 amid monetary policy easing bets.

• Meanwhile the yuan is also under pressure and weakened to a four-month low, after US President-elect Donald Trump demanded that BRICS countries commit to not supporting another currency to replace the US dollar or face 100% tariffs.