China stocks fall but gain 5% in November as recovery picks up steam

30 Nov 2020 / 15:50 H.

    SHANGHAI, Nov 30 (Reuters) - China stocks ended lower on Monday, but posted gains in November, underpinned by stocks in traditional industries, as more data pointed to a continued recovery in the world's second-largest economy against the backdrop of the COVID-19 pandemic.

    ** The blue-chip CSI300 index fell 0.4%, to 4,960.25, while the Shanghai Composite index slipped 0.5% to 3,391.76, reversing earlier gains as investors booked profits.

    ** Sentiment was hit by concerns over Sino-U.S. tensions.

    ** The Trump administration is poised to add China's top chipmaker SMIC and national offshore oil and gas producer CNOOC to a blacklist of alleged Chinese military companies, according to a document and sources.

    ** Though for the month CSI300 gained 5.6%, while SSEC added 5.2%, both posted their biggest monthly advance since July.

    ** Leading the gains for the month, the Shanghai SE50 index , which tracks the 50 most representative traditional stocks on the Shanghai Stock Exchange, rallied 5.8%.

    ** China's factory activity expanded at the fastest pace in more than three years in November, while growth in the services sector also hit a multi-year high, as the country's economic recovery from the virus outbreak stepped up.

    ** Upbeat data released on Monday suggested the world's second-largest economy was on track to become the first to completely shake off the drag from widespread industry shutdowns, with recent production data showing manufacturing now at pre-pandemic levels.

    ** The main reason for the strong rally was China's continued recovery, said Zhang Gang, an analyst with China Central Securities.

    ** The cyclicals rally would also continue for a while as their valuations remain low, at least before China's Lunar New Year holiday if investors do not find good opportunities in growth players, Zhang added. (Reporting by Shanghai Newsroom; Editing by Shounak Dasgupta)

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