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China: Stocks decline after holiday break
[HONG KONG] Chinese shares declined, led by financial and technology companies, as mainland markets traded for the first time after a weeklong holiday. Casino stocks plunged in Hong Kong on speculation declines in revenue will deepen.
The Shanghai Composite Index fell 0.6 per cent to 3,228.84 at the close, erasing its gain for the year. The manufacturing purchasing managers' index for February from HSBC Holdings Plc and Markit Economics came in at 50.1, unexpectedly rising from 49.7 in January after economists projected a reading of 49.5. Readings below 50 signal contraction in the sector.
"The PMI number was slightly better than expected but investors are still nervous that the economy is not strong enough to generate topline growth," said Khiem Do, who helps oversee about US$60 billion as Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd. "There's a gap of perceptions between investors and the government. The economy needs more monetary easing measures."
Trading on the Shanghai exchange was 20 per cent below its 30-day average. The CSI 300 Index lost 1.2 per cent, while the Hang Seng China Enterprises Index and Hang Seng Index was little changed.