SHANGHAI: Hong Kong stocks on Wednesday saw their best day in nearly three months, while China shares also soared, as data showing the country’s February manufacturing activity expanding at the fastest pace in more than a decade boosted risk appetite.
Hong Kong’s Hang Seng benchmark rallied 4.2% and the China Enterprises Index soared 5.1%, both recording the largest one-day percentage gain since December.
Meanwhile, China’s blue-chip CSI300 Index closed up 1.4%, and the Shanghai Composite Index gained 1.0%.
The unexpected robust reading ignited hopes of a strong recovery after China dismantled its strict COVID-19 restrictions in December. Investors had been keenly looking for more evidence to gauge the pace of economic recovery.
The official manufacturing purchasing managers’ index (PMI), which measures China factory’s activities, stood at 52.6 in February against 50.1 in January.
The PMI far exceeded analysts’ forecast of 50.5 and was the highest reading since April 2012, raising hopes that the economic recovery was getting back on track.
The strong PMI data reflected that the production and logistic disruptions related to the zero-COVID policy and massive infection dissipated quickly, noted Ken Cheung, chief Asian FX strategist, Mizuho Bank.
“We had already been expecting a rapid near-term rebound, but the PMIs suggest that even our above-consensus forecast for GDP growth of 5.5% this year may prove too conservative,” said Julian Evans-Pritchard, head of China economics at Capital Economics.
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