China Stocks Eye Longest Winning Run in a Year as Curbs Eased
2022.05.31 09:06
China Stocks Eye Longest Winning Run in a Year as Curbs Eased
(Bloomberg) — Chinese stocks climbed for a fifth day after data showed a gradual improvement in factory activity and as the financial hub of Shanghai further eased virus-related restrictions.
The CSI 300 Index finished 1.1% higher at the mid-day break, leading gains in Asia and heading for its longest run of gains since June last year. The official manufacturing purchasing managers index rose to 49.6 in May from 47.4 in April. While the below-50 reading still indicates a contraction, it compares with the median estimate of 49 in a Bloomberg survey of economists.
Some optimism is returning to China’s battered stock market as investors bet that easing Covid outbreaks will provide authorities more room to lift strict curbs that have stifled growth. Shanghai will resume road and public transportation from Wednesday in a major step toward full reopening. Meanwhile, latest data showed China’s daily virus cases fell below 100 for the first time since early March.
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“We don’t see the news getting much worse from here,” David Wong, senior investment strategist at AllianceBernstein (NYSE:AB) Hong Kong Ltd., said in a Bloomberg Television interview earlier on Tuesday. “It is very clear that the policy support is on its way.”
The latest developments come after Beijing has been trying to support growth through a variety of measures. The government recently rolled out a broad support package that covered everything from consumption and investment to tax cuts and loan support.
The CSI 300 Index is set to finish May in the green, after back-to-back monthly losses.. Yet year to date, it has lost more than 17%, underperforming the broader Asia benchmark, which is down about 12%.
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