Shanghai stocks close at 13-month high on upbeat GDP data

SHANGHAI: Shanghai stocks rose to a 13-month closing high on Wednesday, as surprisingly firm data pointed to a recovery in the world's second-largest economy.

The blue-chip CSI300 index was unchanged at 4,087.24, while the Shanghai Composite Index ended 0.3 per cent higher at 3,263.12, its highest close since March 21, 2018. The Shanghai index had gained 2.4 per cent on Tuesday.

China's economy grew at a steady 6.4 per cent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.

But analysts warn it is too early to call a sustainable turnaround in China, and further policy support is needed to maintain momentum in the world's second-largest economy. Many had expected a recovery only in the second half of 2019.

China's economy still faces downward pressure, while policy steps to support the economy are starting to bear fruit, the statistics bureau said.

"We believe there is still downward economic pressure in the second quarter, though the stock market will selectively reflect upbeat factors amid 'bullish sentiment', as the gains for now are more driven by expectations of economic recovery than by actual data confirming improvement," CITIC Securities said in report.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.14 per cent, while Japan's Nikkei index closed up 0.25 per cent.

At 07:10 GMT, the yuan was quoted at 6.6914 per U.S. dollar, 0.32 per cent firmer than the previous close of 6.7128.

So far this year, the Shanghai stock index is up 30.8 per cent and the CSI300 index has risen 35.8 per cent, while China's H-share index listed in Hong Kong is up 17 per cent. Shanghai stocks have risen 5.58 per cent this month.

About 35.75 billion shares were traded on the Shanghai exchange, roughly 87.7 per cent of the market's 30-day moving average of 40.77 billion shares a day. The volume in the previous trading session was 35.79 billion.

As of 07:10 GMT, China's A-shares were trading at a premium of 26.84 per cent over the Hong Kong-listed H-shares.