china stocks
Investors look at computer screens showing stock information at a brokerage house in Shanghai. Image Credit: Reuters

SHANGHAI: Chinese shares rallied on Friday afternoon in thin volumes from earlier profit-taking to end the day at a near 13-month closing high, with signs of an economic recovery in China contributing to a recent surge.

At the close, the Shanghai Composite Index was up 0.63 per cent at 3,270.80, erasing earlier losses. It was the strongest close for the index since March 21, 2018.

The blue-chip CSI300 index was up 1.19 per cent at 4,120.61 points, its highest close since March 12, 2018.

Trading activity was relatively thin. About 31.52 billion shares were traded on the Shanghai exchange, roughly 79.2 per cent of the market’s 30-day moving average of 39.79 billion shares a day.

While Chinese equities ended the week on a positive note, their muted reaction following stronger-than-expected economic data released this week shows that investors continue to harbour doubts over the sustainability of China’s economic recovery and the outlook for policy support.

“The economy’s stabilisation in the first quarter is already an established fact. The market’s focus now is how long this stabilisation will continue and how strong it is, and there seems to be a lot of divergence,” analysts at Lianxun Securities said in a note.

The financial sector subindex ended higher by 1.51 per cent, the consumer staples sector gained 0.35 per cent, the real estate index finished up 1.5 per cent and the health care subindex added 0.4 per cent.

The smaller Shenzhen index ended up 0.94 per cent and the start-up board ChiNext Composite index was higher by 0.66 per cent.

Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.04 per cent, while Japan’s Nikkei index closed up 0.5 per cent.

At 0716 GMT, the yuan was quoted at 6.7054 per US dollar, 0.05 per cent firmer than the previous close of 6.7085.

The largest percentage gainers in the main Shanghai Composite Index were Deluxe Family Co Ltd, up 10.08 per cent, followed by Tibet Urban Development and Investment Co Ltd, gaining 10.06 per cent and Datong Coal Industry Co Ltd, up by 10.04 per cent.

The largest percentage losses in the Shanghai index were Aurora Optoelectronics Co Ltd down 9.93 per cent, followed by China Publishing & Media Holdings Co Ltd losing 9.73 per cent and Zhejiang Longsheng Group Co Ltd down by 8.94 per cent.

So far this year, the Shanghai stock index is up 31.2 per cent and the CSI300 has risen 36.9 per cent. Shanghai stocks have risen 5.83 per cent this month.

The Shanghai stock index is above its 50-day moving average and above its 200-day moving average.