Shanghai stocks stay at 20-month highs on solid earnings

Source:Reuters-Global Times Published: 2017/8/29 17:38:40

Chinese mainland's major indexes remained at 20-month highs on Tuesday, bolstered by robust earnings reports and expectations of further restructuring of State-owned firms which could lead to more mergers and acquisitions.

The benchmark Shanghai Composite Index gained 0.08 percent to 3,365.23 points, while the CSI300 index fell 0.21 percent to 3,834.54 points as some investors paused for breath after two sessions of solid gains.

Most sectors barely moved.

Investors are awaiting more corporate earnings before month-end, and the latest readings on the health of China's factory and services sectors.

China's factories likely posted another solid month of growth in August, suggesting the world's second-largest economy is still growing at a healthy clip despite rising financing costs and a cooling housing market, a Reuters poll showed ahead of an official survey on Thursday.

"We've seen improvement in sectors such as steel, coal and nonferrous metal, thanks to supply-side reforms," said Shanghai-based hedge fund manager David Dai. "The uptrend in cyclical sectors will likely continue."

The market has also drawn support from signs that the government is accelerating the pace of reforms for State-owned enterprises.

China announced on Monday that top coal miner Shenhua Group Corp Ltd will take over China Guodian Group Corp, among the country's top five State power producers, in a deal that will create the world's largest power utility worth $278 billion.

Guodian's listed unit Guodian Changyuan Electric Power, for instance, soared by the daily limit of 10 percent Tuesday on confirmation of the deal.

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