Free trade zone gives stocks a boost
Updated: 2013-09-24 06:40
Recovering manufacturing activity and enthusiasm for stocks connected to the Shanghai free trade zone pushed the mainland's A-share market higher on Monday.
The flash HSBC Purchasing Managers' Index climbed from a final 50.1 reading in August to 51.2 in September, with 10 of 11 sub-indexes rising.
The CSI 300 Index of the leading Shanghai and Shenzhen A-share listings was up 1.3 percent, while the Shanghai Composite Index rose 1.1 percent.
Analysts said that the Shanghai FTZ helped several companies to post strong gains on Monday. Local media reported that the FTZ might be launched any day.
Shanghai Lujiazui Finance & Trade Zone Development Co Ltd surged by the 10-percent daily limit and Shanghai Waigaoqiao Free Trade Zone Development Co Ltd soared 9.4 percent.
The ChiNext Composite Index, the Nasdaq-like board for high-growth startups, soared 2.5 percent to its highest since December 2010.
Analysts said investors must bear in mind the risk of volatility, with shares having jumped in a short time in September.
"The ChiNext Composite Index has reached a nearly three-year high, and investors need to manage the risk of strong volatility of the board," said Wu Yinzhou, an analyst at Shanghai-based Fulun Investment Consultancy.
Wang Lei, a Shanghai-based analyst at Huaan Securities Co, said that recent gains might not last.
Investors may take profits this week, the last trading days this month before the National Day holiday.
(China Daily USA 09/24/2013 page13)