The National Bureau of Statistics (NBS) issued a number of key figures in China this morning, sending stocks higher. According to the statement published on the NBS website, consumer pirces fell 1.4% in May compared to last year, a sign that policy makers have the ability to keep interest rates low. This in turn will help revive economic growth, spurring investment growth. With Chinese exports down sharply in 2009, domestic consumption and economic activity is key in keeping the world's third largest economy on track.
Another widely watched number, property sales, cam out ahead of expectations. Based on the latest statistics available, property sales accelerated in May and rose 45.3% compared to the same period last year. Total value of propery sales reached Yuan 1 trillion ($146.5 bil) for the first five months of 2009, a sure sign that China is on the way of recovery.
Another sure sign of strong econimc activity was released yesterday. Overall vehicle sales rose 34.2% to 1.12 million in May according to the China Association of Automobile Manufacturers.
Shares in Hong Kong reacted wildly to the positive economic news. That Hang Seng Index jumped 727.17 points or a record 4.03% to 18.785.66. The rally was universal, forty of the forty three member Hang Seng Index components gained. Chinese construction materials, transportation, financials, telecoms all had a strong showing. Guangshen Rail (NYSE:GSH) rose 5.8%, Angang Steel, Jiangxi Copper and Aluminum Corp. of China (NYSE:ACH) jumped just under 10%.
Shares in Shanghai rose 28.36 points or 1.0% to 2,816.25 points, a 10 months high. energy, property and construction materials pulled the index the most.
Positive news from China helped U.S. index futures to point to a higher open. Chinese news sent global indices higher in Asia and Europe setting a positive tone ahead the bell. And while Chinese ADRs are getting overbought, a positive day for China stocks in inevitable on Wednesday.