Shanghai shares up, boosted by new IPO

Shanghai stocks rose this morning as the first initial public offering on the city's stock market in four months jumped 44% on its first day of trading.

The key Shanghai Composite Index gained 0.67 percent, or 13.66 points, to 2,050.07. Turnover was 45.5 billion yuan (US$7.3 billion) by the noon break.

New shares of Shanghai Lianming Machinery Co Ltd leapt by the maximum limit of 44 percent to 14.30 yuan on the Shanghai Stock Exchange today before they were suspended from trading until 10am.

The first IPO on the exchange since February was 150 times oversubscribed after the company priced new shares at a level below the industrial average.

The surge of Lianming Machinery followed the strong performance of three IPOs on the Shenzhen market last week. Feitian Technologies, Wuxi Xuelang Environmental Technology and Shandong Longda Meat Foodstuff all surged by the daily limit of 10 percent today after jumping 44 percent, a ceiling for first-day trading, on Friday.

The market also advanced amid expectations that new manufacturing data due out tomorrow will provide fresh evidence that a slowdown in the world's second-largest economy is stabilizing.

The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest indicator of the country's industrial activity, reached 50.8 in June, up from May's final reading of 49.4. The reading is the highest in seven months and is above 50, a mark that separates contraction from expansion.

Manufacturers gained. Shaanxi Aerospace Power Hi-Tech jumped by 10 percent to 12.09 yuan. China Spacesat rose 6.5 percent to 18.36 yuan. China Aerospace Times Electronics surged 8.6 percent to 11.83 yuan.

China Shipbuilding Industry rose 2.5 percent to 4.87 yuan. China CSSC Holdings added 4 percent to 21.25 yuan.