“Chinese stocks rose, led by property companies and brokerages, as the Shanghai Composite Index extended its bull-market rally.
Gemdale Corp. (600383) led a gauge of property developers to a 21- month high as Fitch Ratings said Chinese homebuilding volumes will rise this year. China Merchants Securities Co. led brokerages higher after Taiwan’s securities regulator said the island will double the limit on mainland Chinese institutions’ securities investments. China Resources Sanjiu Medical & Pharmaceutical Co. (000999) paced declines among health-care shares as technical indicators signaled the stocks are overbought.
The Shanghai Composite rose 1 percent to 2,382.48, its highest close since May 30. The index has climbed 22 percent since Dec. 3, signaling a bull market to some investors. The CSI 300 Index (SHSZ300) climbed 0.5 percent to 2,688.71, taking its surge since Dec. 3 to 28 percent. Hong Kong’s Hang Seng China Enterprises Index (HSCEI) gained 0.9 percent.
“The rally will remain strong as the local economy has shown evidence that it’s growing steadily,” Zhang Haidong, an analyst at Tebon Securities Co., said by phone from Shanghai. “We have risen a lot so there is a requirement for a correction. But this year, we are bound to gain.”
The Shanghai gauge is valued at 13.1 times reported profit, the highest level since March 13, after it exited its longest- ever bear market yesterday. 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.
