SHANGHAI: China stocks closed higher on Monday as a late rally in tech shares offset concerns over weak economic data and a slump in property stocks following Beijing’s policy overhaul, while Hong Kong stocks ended flat.
The blue-chip CSI300 Index recouped early losses to end 0.4 percent higher, while the Shanghai Composite Index rose nearly 1 percent.
In Hong Kong, the Hang Seng Index edged 0.1 percent lower.
Chinese markets were lifted in the afternoon by technology shares.
The CSI Cloud Computing 50 Index gained 4 percent, the CSI Big Data Industry Index advanced 3.5 percent, the CSI Integrated Circuits Index climbed 3 percent and the CSI Artificial Intelligence Index strengthened 2.8 percent.
A rally in technology shares helped ease economic concerns after official data showed China’s factory activity improved in August on stronger demand, although it remained in contraction for a second consecutive month.
Meanwhile, services and construction activity remained weak, underscoring deepening imbalances in the economy.
UBS Securities Chief China Economist Yu Song expected a round of additional support later in the year, citing “more obvious risks of not reaching the annual growth target”.
Market sentiment was also initially dampened by a selloff in property shares after China on Friday rolled out measures to reduce developers’ dependence on presale funds.
“The effort to shrink the presales system will lead to a decline in housing starts,” Zhang Xiaoxi, analyst at Gavekal Dragonomics said in a note, predicting that “more private-sector developers will exit the market” as banks favour state-owned developers.
An index, which tracked China-listed real estate firms, dropped 3 percent, while the Hang Seng Mainland Properties Index tumbled 6 percent.
China’s gold-related stocks fell sharply after US Federal Reserve Chairman Kevin Warsh’s hawkish remarks on Friday triggered a selloff in the yellow metal.
But Chinese banks climbed after the country’s largest banks reported their strongest first-half profit since the height of the property crisis.