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China stocks rise 0.9 pct, PMI boosts confidence

Reuters - Wednesday, July 1

SHANGHAI, July 1 - Chinese stocks rose 0.9 percent on Wednesday, led by property shares after manufacturing surveys showed a steady recovery in June although approval of the first major IPO in Shanghai in 10 months could dampen sentiment.

Hong Kong's financial markets are closed on Wednesday for the anniversary of the territory's handover to China from Britain.

Here are the Chinese index moves and top stock moves in early trade-

* The Shanghai Composite Index <.SSEC> ended the morning at 2,986.094 points.

* Gaining Shanghai A shares outnumbered losers by 567 to 323, while turnover in Shanghai A shares remained active at 71.4 billion yuan , although this was down from Tuesday morning's 78.2 billion yuan.

* The official purchasing managers' index for June rose to 53.2 from 53.1 in May, above the watershed mark of 50 for a fourth month in a row, while brokerage CLSA's China PMI rose in June to an 11-month high. [ID:nPEK138883]

* Chinese regulators have given Sichuan Expressway <0107.HK> final approval to issue 500 million yuan-denominated A shares to be floated on the Shanghai Stock Exchange, a source familiar with the deal said. [ID:SHA178756]

That marks the first major IPO and the first new offering for the Shanghai market in 10 months, following approval of three smaller IPOs in Shenzhen, after China signalled in late May it would resume new offerings that had been suspended since last September.

* "Sentiment may turn cautious but there is still a possibility for the index to rise. The PMI boosted confidence in the economic recovery," said Xiangcai Securities analyst Wu Nan. He added that the government was still expected to act so as to maintain market stability.

* Property shares were strong, with China Vanke <000002.SZ>, the country's biggest listed property developer, gaining 4.86 percent to 13.37 yuan after it hiked its 2009 housing starts target by at least 30 percent, reflecting a sales boost from Beijing's recent economic stimulus measures. [ID:nHKG179842]

* Financial shares were strong, with Shenzhen Development Bank <000001.SZ> rising 5.32 percent to 22.98 yuan after shareholders earlier this week approved its plan to sell shares to Ping An Insurance <601318.SS>, which jumped 4.79 percent to 51.83 yuan. The approval removed one element of uncertainty hanging over the deal.

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