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Hong Kong - Chinese stocks rose as property companies rallied the most in three months on speculation the government will loosen monetary policy and drugmakers climbed amid Beijing’s worst pollution of the year.
The Shanghai Composite Index gained 0.3% to 3 456.31 at the close. Poly Real Estate Group and China Vanke jumped by the 10% daily limit.
Data showed China’s manufacturing conditions slipped to the weakest level in more than three years, putting pressure on the government to add to the six interest-rate cuts since November last year.
Hong Kong’s Hang Seng China Enterprises Index rose 2%, snapping a six-day losing streak.
“There are continuous high expectations of further policy support in the property sector," said Gerry Alfonso, a sales director at Shenwan Hongyuan Group in Shanghai. "The seasonal occurrence of high pollution, during the cold season, tends to help the share price of health-care and other related companies."
A private measure of China’s factories came in stronger than economists had expected and an official non-manufacturing gauge signaled faster expansion, while the government’s factory index slid to the lowest in more than three years.
Air pollution enshrouding Beijing forced some parents to keep their children home from school as municipal officials limited factory output in efforts to dispel a shroud of smog that covered the Chinese capital for the third day in a row.
