China stocks rose on Wednesday, encouraged by robust factory activity data and President Xi Jinping reiterating a promise of "high-quality development", even as concerns remain over the economy's uneven growth.
** The large-cap index CSI300 SZSE:399300 gained 0.4% by the lunch break, while the Shanghai Composite Index SSE:000001 rose 1.1%. The 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.
** 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".
** "Discussions focused on fragile consumer confidence amid labour market pressures and the negative wealth effect from the ongoing property downturn," the bank said.
** An index tracking chipmaking equipment and materials (.CSI931743) jumped nearly 4% on Wednesday to fresh record highs.
** Stocks in innovative sectors including biotech (.CSI399993) and software (.CSI932094) also gained.
** Some traditional sectors, including agriculture (.CSI930707) and property (.CSI000948) also rose sharply on Wednesday, reflecting broadening interest from investors.
** "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."