China: Stocks hit 7-yr high, weak factory activity fans stimulus optimism

[SHANGHAI] China stocks rose to fresh seven-year highs on Thursday, with weaker-than-expected factory activity data reinforcing expectations of fresh government stimulus.

The flash HSBC/Markit Purchasing Managers' Index (PMI) showed that China's factory activity in April contracted at its fastest pace in a year, suggesting that economic conditions are still deteriorating.

Barclays said in a research note that it expects "stepped-up policy easing measures to stabilise the property market, boost infrastructure investment, and lower the cost of financing in the economy." The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose slightly and ended at 4,740.89, while the Shanghai Composite Index gained 0.4 per cent, to 4,414.51 points.

Shenzhen's start-up board ChiNext jumped nearly 2 per cent to a fresh record high.

REUTERS