China's blue-chip index hits 5½-year high on upbeat data; Hong Kong slips

China's blue-chip index hits 5½-year high on upbeat data; Hong Kong slips
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SHANGHAI (Nov 30): China's blue-chip index scaled a near 5½-year high on Monday, led by gains in traditional industries, as upbeat factory activity data showed continued recovery in the world's second-largest economy amid the coronavirus outbreak.

The CSI300 index rose 1.3% to 5,045.01 points, its highest since June 18, 2015, while the Shanghai Composite Index gained 1.1% to 3,444.84 points.

Leading the gains, the Shanghai SE50 index, which tracks the 50 most representative traditional stocks on the Shanghai Stock Exchange, climbed as much as 2% to its highest since February 2008.

China's factory activity expanded at the fastest pace in more than three years in November, while growth in the services sector also hit a multi-year high, as the country's economic recovery from the coronavirus stepped up.

Upbeat data released on Monday suggests the world's second-largest economy is on track to become the first to completely shake off the drag from widespread industry shutdowns, with recent production data showing manufacturing now at pre-pandemic levels.

The main reason for the strong rally was China's continued recovery, said Zhang Gang, an analyst with China Central Securities.

The cyclicals rally would also continue for a while as their low valuations remain low, at least before China's Lunar New Year holiday if investors do not find good opportunities in growth players, he added.

In Hong Kong, stocks fell as energy firms dragged. The Hang Seng index dropped 0.5% to 26,760.53 points, while the Hong Kong China Enterprises Index lost 0.2% to 10,771.61.

The Hang Seng energy slumped 5.6% by midday, led by China's national offshore oil and gas producer CNOOC Ltd tumbling 10.4% after news of US blacklisting.