Mainland stock exchanges underperform, ChiNext upbeat

Stock markets in the Chinese mainland retreated Thursday, after the release of data showing a contraction in factory activity for the first time in six months.

The benchmark Shanghai Composite Index fell by 9.57 points or 0.47 percent to 2,042.18 points on Thursday. The Shenzhen Component Index nudged down by 31.98 points or 0.41 percent to 7,788.47 points.

Combined turnover on the two bourses on Thursday was 211.75 billion yuan ($34.98 billion), slightly down from Wednesday's 216.09 billion yuan.

The flash Markit/HSBC Purchasing Managers' Index was at 49.6 for January, below the 50 line that separates contraction from expansion. The final reading in December was 50.5.

The People's Bank of China (PBC), the central bank, continued to inject cash into the money market ahead of the Spring Festival holidays. The PBC poured in another 120 billion yuan on Thursday through reverse repurchase agreements after an injection of 255 billion yuan on Tuesday.

Despite the PBC's move, the banking sector saw a fall on Thursday. China Merchants Bank Co fell by 1.68 percent to 10.52 yuan while Hua Xia Bank Co declined by 1.47 percent to 8.03 yuan.

ChiNext, China's NASDAQ-style board for high-tech and fast-growing start-ups listed in Shenzhen, gained strongly on Thursday by 29.78 points or 2.08 percent, reaching a record high of 1,461.53 points at the close.

The gain in ChiNext was boosted by five new IPOs on Thursday. All five companies, including Beijing Echo Technologies Co, Beijing Forever Technology Co and Tangshan Huizhong Instrumentation Co, jumped by the daily limit of 45 percent for new offerings.

ChiNext-listed Leshi Internet Information and Technology Corp and Tangel Publishing Co soared by the daily limit of 10 percent to 54.33 yuan and 36.30 yuan, respectively.