China stocks extend gains, aided by earnings outlooks at resource firms

Shanghai: China stocks extended gains on Monday, as investors piled into resource firms which forecast jumps in first-half earnings, reinforcing a rotation into blue chips that feature solid growth and fundamentals.
The blue-chip CSI300 index rose 0.5 per cent, to 3,737.87, while the Shanghai Composite Index added 0.6 per cent to 3,273.03 points, its highest since mid-April.
For the month, CSI300 advanced 2.0 per cent, while SSEC gained 2.5 per cent.
The market had a muted reaction to official figures released on Monday that showed China's July factory growth cooled slightly as export orders eased.
The official Purchasing Managers' Index (PMI) stood at 51.4 in July, down from the previous month's 51.7, but still well above the 50-point mark that separates growth from contraction on a monthly basis.
China posted stronger-than-expected economic growth of 6.9 per cent in the first half, fuelled by a year-long construction boom, resurgent exports and robust retail sales.
Sector performance was mixed.
Material stocks far outperformed the broader market, with the materials index surging 4 per cent to a nearly three-year high after sector leaders forecast robust half-year profits.
Banking and real estate stocks lagged.
"We continue to recommend consumer, financial and cyclical firms with solid performance and low valuations," Haitong Securities wrote in a report.
The tech-heavy start-up board index ChiNext languished with a 0.1 per cent gain, amid worries over cooling profit growth at those firms and a fast pace of initial public offerings.