Nov. 1 (Bloomberg) -- China’s stocks rose after a manufacturing index dropped to the lowest level since February 2009, boosting speculation the government will loosen monetary policy to support the economy.
The Shanghai Composite Index gained 0.6 percent to 2,482.92 at 10:33 a.m. local time, erasing a drop of as mucg as 0.9 percent. The Purchasing Managers’ Index fell to 50.4 in October from 51.2 in September, the China Federation of Logistics and Purchasing said in a statement today. That was lower any of 16 economists estimated in a Bloomberg News survey that had a median forecast of 51.8. A reading above 50 indicates expansion.
China may be more likely to ease monetary policies amid slowing economic growth, said Nicholas Yeo, the Hong Kong-based head of China and Hong Kong equities at Aberdeen Asset Management.
“There is higher likelihood that there’ll be easing, but the Chinese government doesn’t like to do it in an abrupt way,” Yeo said in a Bloomberg Television interview in Hong Kong. “It’s going to be gradual because one big factor is inflation,” which remains “stubbornly high,” he said.
The manufacturing index from HSBC Holdings Plc and Markit Economics rose to 51.0 in October from 49.9 in September. The index’s preliminary reading issued on Oct. 24 was 51.1.
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