By Ambar Warrick
Investing.com-- China’s blue-chip index led gains among Asian stocks on Monday, recovering from its lowest level since mid-June as data showed service sector activity in the country continued to expand despite a slowdown in manufacturing.
The Shanghai Shenzhen CSI 300 blue-chip index was up 0.6% as of 12:54 am ET (0454 GMT), with consumer-oriented service sector stocks gaining the most. Tsingtao Brewery Co Ltd (SS: 600600 ), Anhui Jianghuai Automobile Group Corp Ltd (SS: 600418 ) and Citic Guoan Wine Co Ltd (SS: 600084 ) were among the best performers on the index, rising between 7% and 10%.
The Shanghai Composite index rose 0.1%,
Government data on Sunday showed that China’s service sector continued to expand through July, albeit at a slower pace. But this still helped offset an unexpected contraction in manufacturing activity.
China’s non-manufacturing purchasing managers index was 53.8 in July, compared to 54.7 in June. A reading above 50 indicates expansion.
“This shows a continual recovery of services after lockdowns were lifted in early June. Since then, China has adopted a more flexible approach on Covid testing and quarantines, which also helps the recovery of services,” analysts at ING wrote in a note.
“We expect these service industries to keep expanding in August as summer holiday travels within China should boost services activities.”
Blue-chip property stocks were the worst performers on Monday, with majors such as Shanghai Construction Group Co Ltd (SS: 600170 ), Poly Real Estate Group Co Ltd (SS: 600048 ) and Gemdale Corp (SS: 600383 ) dropping between 3% and 5%.
The sector was also rattled by China Evergrande saying that one of its units would have to pay 7.2 billion yuan ($1.1 billion) to a guarantor over its debt obligations.
The Taiwan Weighted benchmark dropped 0.4% as sentiment turned sour over U.S. House Speaker Nancy Pelosi’s possible visit to the island. China has strongly opposed the trip.
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