February 28, 2017 / 7:21 AM / in 2 years

China stocks edge up in thin trading as key resistance looms

SHANGHAI, Feb 28 (Reuters) - China stocks edged up on Tuesday in thin trading as caution prevailed following a months-long run-up to the main index’s late-November peak, a key technical resistance.

The blue-chip CSI300 index rose 0.2 percent, to 3,452.81 points, while the Shanghai Composite Index gained 0.4 percent to 3,241.73 points.

Both indexes rose for the second month on signs of a recovery in the world’s second largest economy, with CSI and SSEC up 1.9 percent and 2.6 percent in February.

Activity in China’s manufacturing sector likely grew modestly for the seventh month in a row in February as resources prices extended a rapid rally, a Reuters poll showed.

However, some investors have grown increasingly cautious, as Beijing shifts toward tighter monetary policies and strengthens market regulations.

A monthly Reuters poll showed China’s fund managers have trimmed suggested equity exposure for the next three months, while recommending higher bond exposure.

a Shanghai-based fund manager said he expected little index movement as “most participants were uncertain about future trends.”

The fund managers recommended accumulating shares in financials and in cyclical sectors, such as metals and machinery, that benefit from a building boom.

For the day, sector performance was mixed. Gains were led by infrastructure shares.

Wang Wei, founder and main shareholder of S.F. Holding Co Ltd, has surpassed Tencent Holdings Ltd’s Ma Huateng to become the country’s 4th richest person, after his firm’s stock surged nearly 70 percent in just six trading days. (Reporting by Luoyan Liu and John Ruwitch; Editing by Randy Fabi)

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