China stock market rises on robust activity data

China stock rises: China's stock market experienced a rise on Monday, propelled by encouraging data indicating that the country's factory output and retail sales surpassed expectations during the January-February period. 

The Shanghai Composite Index and the blue-chip CSI300 Index both saw gains of 0.5 per cent by midday.

While Hong Kong's benchmark Hang Seng remained relatively unchanged, the Hang Seng China Enterprises Index witnessed a modest increase of 0.3 per cent.

Industrial output in Beijing demonstrated a remarkable annual increase of 7 per cent over the first two months of the year, with retail sales also climbing by 5.5 per cent year-on-year. 

However, concerns lingered over the real estate sector, as property investment recorded a 9 per cent decline compared to the previous year, highlighting the necessity for additional policy support.

Asian shares received a boost as Chinese data pleasantly surprised investors, amid anticipation surrounding central bank meetings scheduled for the week. Notably, Japan could see an end to free money policies, while the U.S. might adopt a slower approach to rate cuts.

Goldman Sachs remarked in a note that the January-February activity data exceeded market expectations. Although there were divergences across sectors, the firm believes China's sequential growth momentum remained robust in the first quarter. 

Nonetheless, achieving the ambitious growth target of around 5 per cent for the year would likely necessitate further policy easing, particularly on the demand side.

The China Securities Regulatory Commission introduced a new set of rules aimed at enhancing scrutiny over stock listings, public companies, and underwriters. 

The move comes as regulators intensify efforts to restore investor confidence.

Within the market, shares in information technology, securities brokers, and new energy saw gains ranging between 1.1 per cent and 1.8 per cent. Meanwhile, the automobile sector surged by 3.5 per cent.

Tech giants listed in Hong Kong experienced a modest increase of 0.5 per cent, with social media behemoth Tencent rising by 2 per cent.

However, the Hang Seng Mainland Properties Index experienced a notable decline of 2.1 per cent, and the CSI 300 Real Estate Index slipped by 0.8 per cent. This occurred despite data indicating that China's housing market commenced the year with slower declines in property investment and sales, underscoring the sector's fragility.

(With Reuters Inputs)