INSUBCONTINENT EXCLUSIVE:
China shares rose more than 3 per cent on Monday after last week's steep losses, as bleak economic data fuelled hopes Beijing would roll
out more measures to support the world's second-largest economy, while a decline in new coronavirus cases also helped
sentiment.
Infrastructure and real estate stocks led the bounce-back, with Shanghai shares up 3.2 per cent, its biggest since late March
2019, while the blue-chip CSI300 index rallied 3.3 per cent, its best since last May.
On Friday, fears that the fast-spreading coronavirus
cases outside of China could turn into a pandemic, had sent global equity markets tumbling
Last week, both the indexes dropped 5 per cent.
Data released over the weekend showed China's factory activity contracted at the fastest
pace ever in February, even worse than during the global financial crisis, highlighting the colossal damage from the virus outbreak.
The
official Purchasing Managers' Index fell to a record low of 35.7 in February from 50.0 in January, the National Bureau of Statistics said on
Saturday, well below the 50-point mark that separates monthly growth from contraction.
On Monday, a private survey showed factories were
dealt a devastating blow last month as the epidemic triggered the sharpest contraction in activity on record, with the health crisis
paralysing large parts of the economy.
Real estate and infrastructure stocks, sensitive to China's stimulus package as they had been used
to provide a floor to the economy in the past, including during the 2008 global financial crisis, shined on Monday.
The SSE industrials
sector and the SSE properties subindex both ended more than 5 per cent higher.
Infrastructure stocks, which have an advantage in terms of
low valuations and absolute prices, rallied as investors expected Beijing's policy support to hedge the virus impact on the economy, said
Wang Mingli, executive director of Youpu Investment, a Shanghai-based private equity fund.
From a long-term perspective, the A-share market
is worth investing, given China's increasing comprehensive strength, which could be seen in its better control of the outbreak than any
other countries, Wang said.
Chinese policymakers have implemented a raft of measures to support the economy jolted by the outbreak that is
expected to have a devastating impact on the first-quarter growth.
Foreign investors, seen as a key player as Beijing further opens up its
capital markets, came back after six sessions of net selling, purchasing nearly 7 billion yuan worth of A-shares.
Adding to investor
optimism was a drop in the cases of coronavirus in the country
The central Hubei province, the epicentre of the country's coronavirus outbreak, reported less than 200 cases of new infections for the
first time since January.
Excluding the new infections in Hubei, there were only six new cases in mainland China, the lowest since last