Shares end higher after bruising October

Stocks in China closed higher on Wednesday amid rising investor optimism after authorities this week pledged support for markets, but the country’s main indexes fell sharply for October while new manufacturing data pointed to more weakness ahead.

At the trade closing, the Shanghai Composite Index was 1.35 percent higher at 2,602.78 points. The index fell 7.7 percent for October, its biggest monthly drop since June. The blue-chip CSI300 index ended 1.40 percent higher, but is down 8.3 percent for the month, its worst monthly performance since January 2016. The smaller Shenzhen index ended up 1.46 percent and the startup board ChiNext Composite Index was higher by 1.24 percent.

Analysts attributed Wednesday’s rise to the Chinese securities regulator’s promise on Tuesday that it will improve market liquidity and encourage share buybacks.

“This won’t bring about new capital immediately,” said Zhang Qi, a Shanghai-based analyst at Haitong Securities. “But the policy signals of supporting the stock market are very clear, and the markets are reacting.”

Investors paid less attention to Purchasing Managers’ Index (PMI) data, which indicated that China’s manufacturing growth in October was at its weakest pace in over two years.

“We’ve had a long period of selling, the market is numb to this sort of news,” said Cao Xuefeng, head of research at Huaxi Securities. “Most people have been expecting it to be lower than before. Even though PMI is weaker, it is still above 50, which is where most people expected it to be.”

So far this year, the Shanghai stock index is down 21.3 percent while the CSI300 has fallen 21.8 percent.