“China’s stocks rose, sending the benchmark index into a bull market, on optimism over the outlook for the nation’s economy. Financial and energy shares led gains.
The Shanghai Composite Index (SHCOMP) climbed 0.5 percent to 2,358.98 at the close, extending its advance since Dec. 3 to 20 percent, a threshold signaling a bull market to some investors. Haitong Securities Co., the second-biggest listed brokerage jumped 7.3 percent, leading a rally for financial shares. Shanxi Lu’an Environmental Energy Development Co. surged 3.1 percent as oil traded near the highest level in four months in New York.
Chinese stocks have rallied since approaching a four-year low last month on signs of an economic recovery and a government pledge to bolster urban development. A government report showed yesterday industrial companies’ profits jumped 17.3 percent last month. A preliminary reading for a Purchasing Managers’ Index last week showed manufacturing expanded at the fastest rate in two years.
“The economic is recovering and this is the year of reforms by new leaders, so there are a lot of expectations,” Deng Wenyuan, an analyst at Soochow Securities Co., said by phone from Suzhou, near Shanghai. “We are expecting urbanization to pick up pace and there are hopes for more liquidity in the stock market. This rally should continue.”
The CSI 300 Index (SHSZ300) advanced 0.9 percent to 2,675.87 today and is up 27 percent since Dec. 3. The Hang Seng China Enterprises Index (HSCEI) slid 0.3 percent today. The Bloomberg China-US 55 Index increased 0.1 percent in New York yesterday.
The Shanghai Composite exited its longest-ever bear market today. A 756-day stretch without a 20 percent gain from Nov. 8, 2010, through Dec. 3 is the longest on record, according to data compiled by Bloomberg and Birinyi Associates Inc. The gauge fell 38 percent during the period.
