Chinese stocks rise in Shanghai as volatility slumps

Hong Kong - Chinese stocks rose in Shanghai and Hong Kong, with volatility in mainland equities plunging to 15-month lows, as investors sought companies least exposed to a slowdown in the manufacturing economy.

The Shanghai Composite Index advanced 0.5%, led by technology, phone and consumer-staples companies. Price swings in the benchmark gauge slumped to the lowest levels since March 2015 as interest in trading continued to dwindle.

Trading volumes in the mainland and Hong Kong were at least 29% below the 30-day average for this time of day. Goertek and Han’s Laser Technology Industry Group rose after a media report that Apple asked suppliers to prepare production of a new version of its smartphones.

Chinese equities, known for their stomach-churning volatility during a recent speculative boom and bust, have been stuck in range-bound trading this month amid concern about the sustainability of the nation’s economic growth.

Suspected buying by state-backed funds aimed at preventing the Shanghai index from ending below 2 800 has offset selling amid gloomy data and a weaker yuan, according to Shanghai Bingsheng Asset Management.

“The market is still in a long-term downtrend and rebounds tend to be short and unsustainable,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai.

Technology, staples

The Shanghai Composite climbed for a second day to 2 840.43 at 07:36. The Hang Seng China Enterprises Index increased 0.4% in Hong Kong, while the Hang Seng Index added 0.2%.

Gauges of telecommunication, technology and consumer-staples companies in the CSI 300 Index rose at least 0.7% for the steepest gains among 10 industry groups, while the large-cap measure added 0.3%.

The China Minxin Manufacturing Index slid 1.1 percentage points to 45.8 in May from the previous month, according to a private survey conducted by China Minsheng Banking and China Academy of New Supply-side Economics and released over the weekend.

China’s traders are continuing to pile into producers of meat and alcohol on bets such companies will endure a deepening slowdown.

Henan Shuanghui Investment & Development, a producer of frozen foods, jumped 1.6%. Kweichow Moutai , the biggest producer of Moutai liquor, rose for a third day, adding 1.1%.

Apple suppliers Goertek and Han’s Laser advanced at least 0.8%. The

US smartphone maker asked suppliers to prepare for an output of 72 million to 78 million units of the iPhone 7 series by the end of 2016, the highest target in about two years, Taiwan’s Economic Daily reported, citing unidentified suppliers it surveyed in China.