Key index closes at highest in 9 months

SHANGHAI'S key stock index yesterday rose to the highest in nearly nine months after data showed China's manufacturing activity continued to climb in January.

The Shanghai Composite Index gained for a fifth straight day when it added 1.4 percent to 2,419.02 points, the highest close since May 9. For the week, the benchmark jumped 5.6 percent, the biggest weekly gain since October 2011.

HSBC's China Purchasing Managers' Index, a gauge of manufacturing activity slanted toward private and export-oriented firms, rose in January to a two-year high of 52.3, up from 51.5 in December, HSBC Holdings Plc said yesterday. A reading above 50 indicates expansion.

China's official PMI, which is geared toward state-owned firms, eased to 50.4 in January from December's reading of 50.6, according to the China Federation of Logistics and Purchasing. The January PMI fell for the first time in six months and was below market expectations of 50.9.

But Lian Ping, chief economist at the Bank of Communications, said that although the official PMI figure fell slightly, it was still an expansion. "The rising raw material stock index indicated factories have begun re-stocking as domestic demand is rising," Lian said.

Brokerages gained after Guosen Securities expect the industry's net profit to gain 13.7 percent this year.

CITIC Securities, China's biggest listed brokerage, rose 3.7 percent to 15.74 yuan (US$2.53). Founder Securities surged by the daily limit of 10 percent to 6.37 yuan. Haitong Securities jumped 5.4 percent to 12.54 yuan.

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