Markets mixed after lackluster PMI release

Stock markets in Shanghai and Shenzhen diverged Monday as early data showed China's manufacturing activity slumping in February.

The benchmark Shanghai Composite Index added 11.66 points, or 0.50 percent, to close at 2,325.82; while the Shenzhen Component Index shed 22.17 points, or 0.24 percent, to finish at 9,342.37.

Both indices opened higher on the back of gains to banking, securities and environmental protection shares. Strong performances from these sectors continued throughout the trading day, although their momentum was ultimately too weak to help the Shenzhen Component shake off signs of slowing factory output.

HSBC's preliminary February purchasing managers' index (PMI) for China's manufacturing sector came in Monday with a headline reading of 50.4, the lowest reading in four months and down from a final reading of 52.3 in January, yet still above the 50 point mark which divides expansion from contraction.

Environmental protection stocks staged a rally following news that air pollution is on the agenda for discussion at China's annual national congress meetings scheduled for March. Zhongyuan Environmental Protection Co surged by its daily 10-percent trading limit to 12.18 yuan ($1.95).

Meanwhile, petroleum stocks notched gains after China's top economic regulator increased wholesale gasoline and diesel prices Monday. Energy giant China Petroleum and Chemical Corp, popularly known as Sinopec, added 2.72 percent to 7.17 yuan.

Monday also saw financial stocks clawing back from the losses many took during the previous trading week. Founder Securities Co rose 5.87 percent to 5.95 yuan.

Liquor shares fell Monday as industry leaders Kweichow Moutai Co and Wuliangye Yibin Co were officially fined 449 million yuan for violating anti-trust laws. Both Moutai and Wuliangye shaved off just over 2 percent to 181.09 yuan and 25.19 yuan respectively.