Investors cheer China's accelerated factory activity

Chinese A-share stocks extended a rally with the Shanghai Composite Index, climbing to a three and a half-month high, on Tuesday.

Investors were cheered as the country's factory activity accelerated in July, and the listed companies released pleasing semi-annual report performance forecast.

The Shanghai Composite Index closed the day with a 0.60 percent gain to 3,292.64 points. Finance and Xiongan-themed shares were among the biggest climbers, and New China Life Insurance Co Ltd increased by the 10 percent upside limit.

The Shenzhen Component Index also rose 0.19 percent, while the ChiNext startup index climbed 0.27 percent. The SSE 50, dubbed China's "Nifty Fifty" index, scaled a two-year peak.

China's manufacturing activities also expanded at the fastest pace in four months in July on the back of economic stabilization, according to a survey conducted by Markit and sponsored by Caixin Media Co Ltd on Tuesday.

The Caixin China General Manufacturing Managers' Index stood at 51.1 for July, up from 50.4 in June, and was above the 50-point mark that separates growth from contraction.

"Pleasing PMI data and good business performance of listed companies in the first half have contributed to today's rise," Hong Hao, chief strategist at BOCOM International Ltd, said, adding large-cap shares and upstream resources ones performed the best.

According to market intelligence provider Tonghuashun, 108 A-share listed companies will release their semi-annual reports this week. Of them, 75 companies have released their business performance forecast and a total of 62 have reported positive profit estimates.

For example, representatives of Shan Dong Haihua Company Ltd, Shanxi Xishan Coal and Electricity Power Co Ltd, Nuode Investment Co Ltd, China Fangda Group Co Ltd, Suzhou Boamax Technologies Group Co Ltd and Shanghai Xuerong Bio-Technology Co Ltd said their profits in the first half of the year would increase more than 200 percent year-on-year respectively.