China’s major stock indexes slipped on Monday after the country’s factory activity slowed slightly in May, but were on track for best monthly gain in about six months.
The CSI300 index fell 0.5% to 5,296.53 points at the end of the morning session, while the Shanghai Composite Index lost 0.2% to 3,593.61 points.
Shenzhen’s start-up board ChiNext added 1.6%, while Shanghai’s tech-focused STAR50 index climbed 3.1%.
The CSI new energy index rose 3.4%, while the CSI300 transport index and the CSI300 consumer discretionary index fell 1.8% and 1.9%, respectively.
China’s factory activity slowed slightly in May as raw materials costs grew at their fastest pace in over a decade, weighing on the output of small and export-oriented firms.
For the month, CSI300 gained 3.4%, its best since Dec 2020, while SSEC firmed 4.3%, its best since Nov 2020.
Analysts and traders said a recent series of soft data decreased worries over policy tightening, while a stronger yuan helped attract more foreign inflows.
Investors in the past week purchased a record 46.8 billion yuan ($7.36 billion) worth of A-shares via the Stock Connect linking the mainland and Hong Kong.
“There is relatively ample liquidity in the market, while China’s economy remains in the recovery stage and has yet to entered into a stagflation stage,” said Fu Yanping, a wealth management strategist at China Galaxy Securities.
Fu said he did not see a continued rally in the market, adding that investors should pocket gains after indexes hit higher levels as the market would remain range-bound going forward.
The Hang Seng index dropped 0.5% to 28,978.85 points, while the Hong Kong China Enterprises Index gained 0.1% to 10,799.46.
