Any other day, especially with traders so on edge over anything to do with China, futures would be deep in the red after Beijing reported another sharp drop in the Caixin manufacturing PMI, which slumped from 51.3 in June to 50.3, missing expectations of 51.0 and on the verge of contraction while the new orders sub-index did contract, sliding to 49.2 from 51.6, the first time below 50 since last May.
… but not today, and instead Chinese stocks surged by the most in ten weeks as traders rushed to buy everything from baijiu producers to construction firms on expectations of increased support for the economy after Beijing signaled it would intensify policy support in the second half of the year to bolster the country’s economic growth amid deceleration, China Daily says in a report on Monday and confirming what we reported two weeks ago in “China’s Credit Impulse Just Bottomed With Profound Implications For Global Economies And Markets“.
The benchmark CSI 300 Index soared 2.6%, its best day since May 25. Consumer shares led gains, with Kweichow Moutai Co. and Wuliangye Yibin Co. adding at least 4.5%. In Hong Kong, the Hang Seng Index gained 1.1%.
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