Shanghai stocks defy Wall Street with a solid rally

Spencer Platt – GettyImages

Chinese stocks today defied both the weak lead from Wall Street and the big fall in the MNI business sentiment indicator, which fell to 51.3 in September from August’s 56.

Commenting on the survey, MNI Indicators chief economist Philip Uglow said “Headline sentiment has been heavily influenced by external factors such as policy announcements and stock market volatility in recent months, although not even the rate cut and currency devaluation was enough to sustain last month’s surge.”

Nevertheless, Uglow highlighted that while business sentiment is volatile in the current economic and financial backdrop, “dig a little deeper, though, and some of the core activity measures are performing better and are considerably up from the July lows. Moreover, companies have welcomed the yuan devaluation and continue to report improved access to credit.”

That’s a positive within an overall weak result, which perhaps helped buying in Shanghai across the day, with the rally strong from the open this morning. All sectors were higher at the close of trade with the technology sector the best performer on the Shanghai Composite, posting a 4.5% gain.

That helped the composite index close strongly on its highs for the day up 1.91% at 3,157. The other major indexes in Shanghai were also higher although the Hang Seng in Hong Kong finished down 1%. Tokyo was closed.

Here’s the chart of the Composite today:

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