China’s Stock Rally Fizzles as Banks Decline, Brokerages AdvanceBloomberg News
The biggest jump in Chinese stocks in almost three months petered out as declines by banks and energy producers countered gains by brokerages.
The Shanghai Composite Index added 0.1 percent. The benchmark measure surged 3.3 percent on Tuesday amid speculation the nation’s shares would be included in MSCI Inc.’s global benchmark indexes. Data Wednesday showed an official factory index hovering at 50.1, around the line between expansion and contraction, while a non-manufacturing gauge fell more than estimated. The yuan traded near its lowest level in five years.
"It’s a bear-market rally and the rebound will probably continue, but at a limited pace," said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, who’s increased his stock holdings to about 30 percent of asset allocations. "The current macroeconomic backdrop of slowing growth and a possible devaluation in yuan doesn’t support a sustained rally."
— With assistance by Shidong Zhang