Technology firms lead rally in mainland China stocks

The mainland's stock markets advanced on their first day of trading yesterday after a week-long holiday, with rallies for technology and small-company shares shrugging off manufacturing and services data signalling an economic slowdown.

Goertek, a supplier to Apple, jumped the most in six weeks to lead gains for technology shares. Anhui Conch Cement led a rally for producers of the building material after Morgan Stanley upgraded its Hong Kong-listed shares on improved prospects for the industry. Ping An Insurance lost 2.4 per cent, tracking declines in its Hong Kong-traded shares during the Lunar New Year holiday.

The Shanghai Composite Index rose 0.6 per cent to 2,044.5 points at the close. The measure lost 3.9 per cent last month, capping the biggest January drop in four years, amid concern that slowing economic growth would hurt earnings.

The ChiNext index of small-company stocks rallied 2.5 per cent to 1,532.69 points, a record high.

Mainland stocks were buoyed by a rebound in global equities over the past two days and a perception that last month's slump was excessive, said Zhang Gang, a strategist at Central China Securities. "Losses for A shares are going to be limited," Zhang said. "Bets should be placed on small-cap stocks."

The CSI 300 Index added 0.5 per cent to 2,212.48 points and the H-share index gained 1.1 per cent to 9,645.39 points.