Shanghai stocks lifted up by transport firms

Shanghai stocks erased earlier losses to end slightly higher on Tuesday, underpinned by strong gains in transport firms even as China posted a disappointing October manufacturing activity index.

Selling pressure eased after Monday’s drop that was triggered by liquidity concerns on the Chinese mainland. China’s treasury bonds steadied on Tuesday as the central bank moved to calm the market with cash injections.

The blue-chip CSI300 index fell 0.07 percent to 4,006.72 points, while the Shanghai Composite Index gained 0.09 percent to 3,393.34 points.

Over the past month, CSI300 has gained 4.50 percent, while the Shanghai index went up 1.30 percent.

Investors were circumspect on Tuesday after the official PMI showed growth in China’s manufacturing sector cooled more than expected in October.

“In general, China’s GDP growth has been trending lower, but does that mean few investment opportunities? We don’t think so,” said Bin Shi, portfolio manager of China equities strategies at UBS Asset Management.

“Beneath the slowdown figures are seismic structural shifts that provide huge opportunities for investors who can capture them.”

Sector performance on Tuesday was mixed, and banking shares slipped the most.

Shanghai International Port leapt 7.46 percent to a more than two-year high, leading a 1.5 percent rise in the transport sector, as some investors expect a free port to be established in Shanghai.