Shanghai Composite Climbs Nearly 1% as Beijing Weighs Fresh Stock Support After Record 12-Week Losing Streak

SHANGHAI — Chinese stocks rose on Monday as investors bet on new government measures to support the market, offsetting disappointing official data showing the economy weakened in October.

The Shanghai Composite index was up 34.21 points, or 0.95%, at 3,633.23 in afternoon trading. The index had risen as much as 1.16% by the midday break.

Gains were stronger elsewhere. The Shenzhen Component index was up 2.39% at midday, while the ChiNext index of growth stocks jumped 3.28%.

Hopes for support

The rally was driven by reports that China's central bank would meet with financial and securities regulators and major banks on Monday to study improving a relending program that helps fund share buybacks.

The meeting comes after Chinese stocks suffered a record 12-week losing streak, with the CSI 300 index recording its worst month in more than a decade in October.

Any new steps would add to stabilization efforts launched last month, which have so far failed to reverse the downturn amid weak domestic demand and concerns about AI-related earnings.

The People's Bank of China also moved to anchor short-term rates, shifting to a daily overnight repo operation at 1.25%, in a move compared to the U.S. Federal Reserve's approach.

Weak official data

The gains came despite discouraging economic figures released over the weekend.

China's official manufacturing purchasing managers' index fell to 49.3 in October from 50.1 in September, back in contraction territory and below forecasts of 49.9. A reading below 50 indicates contraction.

The non-manufacturing PMI, which covers services and construction, slipped to 49.7 from 50.2, while the composite output index dropped a full point to 49.7.

The weakness was broad. Production, new orders and new export orders all fell below 50 in the same month. Officials blamed seasonal factors, including a pullback in export orders after a surge in September and softer consumer demand after the National Day holiday.

Private survey offers relief

A private survey offered a brighter picture. The RatingDog manufacturing PMI rose to 52.0, beating forecasts, with output growth the fastest since April.

The private gauge, which samples a smaller group of companies with a heavier tilt toward exporters, has typically produced stronger readings than the official survey.

Stocks near lows

Despite Monday's gain, Chinese stocks remain near their lowest levels in more than a year. The Shanghai Composite had risen only modestly on the first trading day of November before support hopes lifted sentiment.

Some analysts remain cautious. Morgan Stanley has said it sees 10% to 15% more downside for Chinese offshore stocks before they reach a bottom.

Among individual stocks, battery maker CATL and liquor producer Wuliangye Yibin gained, while major state banks including Agricultural Bank of China and Bank of China declined earlier in the session.

Global factors

Chinese markets are also contending with global headwinds, including a sell-off in U.S. technology stocks and tensions in the Middle East, where disruptions to shipping through the Strait of Hormuz have pushed up oil prices.

What to watch

Investors will be watching for details of any new support measures from Beijing, as well as upcoming trade and inflation data. The outcome of the U.S. midterm elections on Tuesday could also influence sentiment, given the importance of U.S.-China trade relations.

Analysts say a sustained recovery in Chinese stocks will likely require stronger evidence of a rebound in domestic demand, beyond short-term policy support.