Hong Kong stocks bounced back Monday from the previous session's losses.
The $Hang Seng Index(800000.HK)$ rose 1.1%, or 274.77 points, to finish at 26,325.80, rebounding from Friday's 1.4% drop. The Hang Seng China Enterprises Index likewise climbed 1.1%, or 103.38 points, to end at 9,336.60.
Goldman Sachs predicts the world's second-largest economy would relax its fiscal policies in the coming months to stoke growth following a downturn in production.
China's manufacturing PMI fell to 50.4 in July from 50.9 in the previous month, signaling a slowdown in production activity. The decline was bigger than the 50.8 estimates of analysts surveyed by Reuters.
In corporate news, $China Evergrande Group(03333.HK)$ rose nearly 8% at the close after the embattled property developer said it agreed to sell its 11% stake in $HengTen Networks(00136.HK)$ for HK$3.25 billion ($418.2 million).