Most Chinese stocks rose as gains by property developers and health-care companies offset a manufacturing data that missed economist estimates.
China Vanke Co. led developers higher as home prices jumped and Credit Suisse Group AG said property curbs announced by local governments were milder than expected. Drugmaker Guilin Layn Natural Ingredients Corp. jumped by the 10 percent daily limit after health authorities said two people died of bird flu. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. declined 2.6 percent after reporting lower profit.
About two stocks rose for each that fell in the Shanghai Composite Index, which lost 0.1 percent to 2,234.4 at the close. The gauge changed direction at least 10 times after the official Purchasing Managers’ Index posted a reading of 50.9 for March, trailing the 51.2 median estimate of 26 analysts surveyed by Bloomberg News. The CSI 300 Index declined less than 0.1 percent to 2,493.19.
“The PMI indicates the recovery is going on but the strength is a bit weaker than expected,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which manages $120 million. “Local governments’ attitude towards the property market is more lenient” than expected, he said.
Hong Kong’s stock market is closed today for a holiday.
The Shanghai index has dropped 1.5 percent this year amid concern steps to cool property prices will drag on economic growth and as company earnings trailed estimates. The gauge is valued at 9.1 times projected 12-month earnings, the lowest level since December and less than the seven-year average of 15.8, according to data compiled by Bloomberg.
The March PMI released today by the National Bureau of Statistics and China Federation of Logistics and Purchasing was at an 11-month high and up from 50.1 in February. A separate gauge from HSBC Holdings Plc and Markit Economics rose to 51.6 in March from 50.4. Readings above 50 indicate expansion.
Trading volumes in the Shanghai Composite were 31 percent lower than the 30-day average today, according to data compiled by Bloomberg. Thirty-day volatility was close to the highest level in 13 months, the data showed.
The Shanghai Property Index gained 0.9 percent even as China’s largest cities, including Beijing and Shanghai, tightened rules on home purchases. Vanke, the nation’s biggest publicly traded property developer, gained 2.2 percent to 11 yuan. Poly Real Estate Group Co., the second largest, climbed 3 percent to 11.82 yuan.
Beijing banned single-person households from buying more than one residence, while Shanghai prohibited banks from giving credit to third-home buyers, according to the local administrations’ websites. The two cities will also enforce a 20 percent tax on capital gains from property sales.
Detailed property curbs, especially in second-tier cities, are much milder than expected, Jinsong Du, an analyst at Credit Suisse Group, wrote in a report dated yesterday. Housing prices will remain strong in the near term and property stocks may have a near-term rally, according to the report.
New home prices in March posted the biggest gain since January 2011, SouFun Holdings Ltd., the country’s biggest real estate website owner, said in a statement today.
Guilin Layn surged 10 percent to 16.46 yuan. Hualan Biological Engineering Inc. advanced 3.1 percent to 25.20 yuan.
Three cases of infection with H7N9 avian influenza have been diagnosed in Shanghai and Anhui provinces, and two of the victims died, the National Health and Family Planning Commission said yesterday.
Baotou Rare-Earth, China’s biggest producer of rare earth, declined 2.6 percent to 29.05 yuan, the lowest close since March 18. The company reported a 57 percent slump in 2012 profit.
Of the 281 companies in the Shanghai Composite that have released full-year earnings results, 64 percent missed analysts’ estimates, according to data compiled by Bloomberg. Chinese listed companies are required to release annual and first-quarter reports by the end of April.
A gauge of consumer-staple stocks dropped 1 percent today, the biggest loss among the CSI 300’s industry groups. Kweichow Moutai Co., China’s biggest liquor maker by market value, lost 2.3 percent to 164.95 yuan. Wuliangye Yibin Co., the second largest, retreated 1.8 percent to 21.93 yuan.
Liquor makers’ revenue growth may slow to between 10 percent and 15 percent this year, from 27 percent in 2012, amid an official crackdown on spending by government officials, Chen Xiaoyan, an analyst at Industrial Securities Co., wrote in a report dated March 29.