Shanghai stocks rose on Wednesday, encouraged by robust factory activity data and President Xi Jinping reiterating a promise of "high-quality development", while blue-chips slipped, reflecting lingering concerns over the economy's uneven growth.
** The Shanghai Composite Index SSE:000001 closed up 0.4% after hitting a one-week high. The blue-chip index CSI300 SZSE:399300 gave up morning gains to end 0.4% lower.
** SSEC is the most tracked benchmark for onshore Chinese shares, while the CSI300 covers large-caps in both Shanghai and Shenzhen.
** Hong Kong market was closed for a public holiday.
** China's manufacturing sector expanded for a seventh straight month in June, completing its strongest quarter since late 2020, a business survey showed on Wednesday.
** President Xi pledged on Wednesday to "steadily promote high-quality development", which refers to sustainable, innovation-driven growth.
** Tech shares surged, continuing their outperformance against traditional sector stocks and mirroring the real economy's two-speed growth, which stirs concerns.
** Goldman Sachs said in a note that in meetings with Chinese investors over the past week, "local clients appeared more cautious on China's near-term growth momentum", reflecting "a more bifurcated growth mix".
** An index tracking chipmaking equipment and materials (.CSI931743) jumped as much as 6% on Wednesday to record highs.
** Innovative sectors, including biotech (.CSI399993) and software (.CSI932094), also gained.
** Some traditional sectors, including agriculture (.CSI930707) and property (.CSI000948), climbed.
** But market strength was partly offset by sharp drops in sectors ranging from new energy (.CSI000941) and AI SSE:930713 to consumer electronics (.CSI931494).
** Some investors remain optimistic over the long run.
** "We see a lot of growth on offer at better than reasonable prices in China across sectors. So, this is not just a defensive allocation of capital for us," said Vikas Pershad, portfolio manager for Asian Equities at M&G Investments.
** "We'll see in a few years if the earnings and valuations have justified that allocation of capital. But we think it does, which is why we've done that."