Markets squeezed by crosswinds

Stock markets on the Chinese mainland escaped Monday with narrow gains as a mixed bag of news items left its mark on investors.

The Shanghai Composite Index added just 0.07 point, to close at 2,098.45; while the Shenzhen Component Index gained 41.10 points, or 0.50 percent, to finish at 8,243.58.

Combined turnover thinned to 218.46 billion yuan ($35.71 billion). down from Friday's 260 billion yuan.

Both markets found support on signs of expanding factory activity. HSBC's final purchasing managers' index (PMI) for China's manufacturing industry came in early Monday with a final reading of 50.1 for August, in line with its earlier forecast and up from July's reading of 47.7. Meanwhile, China's official PMI hit 51 for the month, a reading which soothed investors anxious about expansion among manufacturers.

The early optimism was countered by reports that Everbright Securities would be fined 523 million yuan for insider trading. Lower-than-expected first half earnings from Kweichow Moutai sent a further chill through the market as the day progressed.

Among the winners, agricultural-linked stocks jumped by an average of 5.96 percent as investors anticipate the Communist Party of China plenary meeting scheduled for November to produce rural reforms. Anhui Huilong Agricultural Means of Production Co Ltd, Heilongjiang Agriculture Co Ltd, Gansu Yasheng Industrial Co Ltd and Gansu Dunhuang Seed Co Ltd all hit the 10-percent daily limit to close at 6.77 yuan, 8.20 yuan, 7.99 yuan and 6.29 yuan respectively.