The Shangai Composite Index Closes 0.83% Higher

The Shanghai Composite edged down 0.1% to around 3,983, while the Shenzhen Component fell 0.9% to 13,889 on the first trading day of September, as escalating tensions in the Middle East overshadowed improving signals from China's manufacturing sector. The US and Iran exchanged strikes for the first time in nearly a month, with American forces targeting an island in the Strait of Hormuz and Iran retaliating with attacks on the UAE and Jordan. The latest hostilities clouded the outlook for restoring normal shipping operations through the strategic waterway. On the domestic front, a private survey showed China's manufacturing PMI rose to 51.5 in August from a four-month low of 50.9 in July, exceeding forecasts of 51.0. This followed official data showing that the manufacturing PMI rose to 49.8 from 49.2, also topping market expectations of 49.7. Among the notable decliners were Foxconn Industrial Internet (-2.1%), SMIC (-1.5%), CATL (-0.8%), and Eoptolink Technology (-1.9%).

The Shangai Composite Index gained 33 points or 0.83 percent on Monday to close at 3985 points. Gains were led by China Coal (5.40%), Bank Of China (5.01%) and Bank Of Beijing (4.91%). Biggest losers were Hua Xia Bank (-5.04%), LONGi Green (-3.54%) and Poly Real Estate (-3.47%).

The Shanghai Composite rose 0.86% to close at 3,986.3 on Monday, while the Shenzhen Component added 0.44% to 14,015, erasing earlier losses despite the latest weak economic data that reinforced concerns over China’s growth outlook. Official PMI data showed the Composite PMI edging up to 49.5 in August from 49.3 in July but remaining in contraction territory, with both manufacturing (49.8) and non-manufacturing (49) activity shrinking. Meanwhile, the government unveiled measures to support the crisis-hit property market, including issuing mortgages only after projects are completed and encouraging local governments to promote sales of completed homes. Banking stocks led the gains, with Industrial and Commercial Bank of China (2.67%), Agricultural Bank of China (1.91%), China Construction Bank (2.71%) and Bank of China Limited (5.17%) all rising. For the month, the Shanghai Composite climbed 4.02%, while the Shenzhen Component gained 3.21%.