Hong Kong and Shanghai stocks kept their head above water after a brief struggle Monday morning, digesting news that China's central bank had lowered interest rates over the weekend due to increasing downward pressure facing the Chinese economy. The easing measure marked the second such move by the People's Bank of China in a little more than three months. The Hang Seng Index and the Shanghai Composite Index each edged 0.3% higher after brief seesaw trade following HSBC's release of its final read of its China manufacturing Purchasing Managers Index (PMI) for February. The HSBC PMI rose to 50.7, up from 49.7 in January, but China's official version of the PMI, published over the weekend, was at 49.9, just below the 50 level separating growth from contraction. Major mainland Chinese banks advanced broadly, with China Merchants Bank Co. adding 1.4%, Bank of Communications Co. up 1.1%, and Industrial & Commercial Bank of China Ltd. higher by 1%. Several major mainland Chinese property developers also gained substantially, as China Resources Land Ltd. , a Hang Seng constituent, climbed 2.4%, and Evergrande Real Estate Group Ltd. moved 0.9% higher. However, Hong Kong-based real-estate stocks mostly declined after the Hong Kong Monetary Authority announced last Friday several measures to cool the local housing market. New World Development Co. lost 1%, Henderson Land Development Co. fell 0.9%, and Pacific Century Premium Developments Ltd. dropped 0.8%. Among the Hang Seng Index's top-weighted members, meanwhile, HSBC Holdings PLC edged down 0.2%, while Chinese online major Tencent Holdings Ltd. and telecoms giant China Mobile Ltd. shed 0.3% apiece.
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