“China’s stocks rose, driving the benchmark index to the highest level in seven months, after industrial profits climbed for a fourth month in December.
Sany Heavy Industry Co. led a rally for heavy machinery stocks after a report showed industrial companies’ net income increased 17.3 percent last month. Citic Securities Co. advanced to the highest level since April 2011 after regulators expanded the number of stocks allowed for margin trading and short selling. Kweichow Moutai Co., the biggest maker of baijiu liquor, dropped the most in seven weeks after Credit Suisse Group AG cut the stock to neutral.
The Shanghai Composite Index (SHCOMP) rose 2.4 percent to 2,346.51, the highest close since June 1. The CSI 300 Index (SHSZ300) climbed 3.1 percent to 2,651.86. The Shanghaiindex has risen 19.7 percent since approaching a near four-year low on Dec. 3 amid signs of an economic recovery. The CSI 300 rallied 26 percent.
“Industrial company profits are fueling gains for the index,” Huang Cendong, an analyst at Tebon Securities Co., said from Shanghai by phone today. “In the longer term, we expect Chinese stocks to rally as company earnings in general will be better this year.”
The Hang Seng China Enterprises Index (HSCEI) added 0.7 percent. The Bloomberg China-US 55 Index (CH55BN) lost 0.9 percent in New York on Jan. 25. Average trading volumes in the Shanghai index were 3.9 percent higher than the 30-day average. The 30-day volatility was at 20.6 on Jan. 25, compared with last year’s average of 17.1. The index trades at 10.1 times estimated earnings, compared with 10.9 for the MSCI Emerging Markets Index.
