China Stocks Advance Most in Four Weeks as Leading Indicator Shows Growth
By Bloomberg News - Sep 21, 2011
China’s stocks rose, sending the benchmark index to its biggest gain in four weeks, after a gauge of economic indicators signaled growth is withstanding Europe’s debt crisis and the faltering expansion in the U.S.
PetroChina Co. led gains by commodity producers after the Conference Board said its leading indicator index rose 0.6 percent in July. Dongfang Electric Corp. jumped the most in eight months, pacing a rally by nuclear power-related companies, after the China Securities Journal said the government may resume approvals for nuclear-power projects.
“The worst period for China’s economy and inflation has passed,” said Mei Luwu, a fund manager at Lion Fund Management Co., which oversees more than $7.8 billion. “Valuations have reached a bottom, leaving limited room for further declines.”
The Shanghai Composite Index jumped 2.7 percent to 2,512.96 at the 3 p.m. close, the biggest advance since Aug. 25. Stocks on the measure trade at 11.6 times estimated profit. Valuations dropped to the lowest level on record this week, according to data compiled by Bloomberg. The CSI 300 Index (SHSZ300) rose 3 percent to 2,771.01.
The Shanghai index has slumped 11 percent in 2011 as the government increased measures to cool inflation that’s at an almost three-year high. Shares have also fallen before Sinohydro Group Ltd.’s initial public offering. The nation’s biggest builder of dams will start selling as many as 3.5 billion shares in Shanghai on Sept. 26, according to a statement to Shanghai’s stock exchange. It may be China’s biggest initial public offering in more than a year.
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