Dec. 19 (Bloomberg) -- China's stocks rose by the most in two weeks after a report that state-owned companies won't ``massively'' sell their shareholdings in listed companies. China Petroleum & Chemical Corp. led gains.

``The news has assured investors that one of their main concerns won't happen in the near future,'' said Wu Kan, who manages the equivalent of $41 million at Dazhong Insurance Co. in Shanghai. ``That has boosted buying sentiment.''

Huaneng Power International Inc. gained after buying a stake in a Shenzhen electricity supplier to expand in southern China.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, gained 117.52, or 2.4 percent, to 4,947.42 at the 11:30 a.m. local-time break, the biggest gain since Dec. 5 and set to end a two-day, 3 percent slide. All the measure's 10 industry groups advanced.

State-owned companies aren't supposed to trade shares or profit from price differences in the stock market, Shanghai Securities News reported today, citing State-owned Assets Supervision and Administration Commission's director Li Rongrong.

A 142 percent gain in the CSI 300 this year spurred concern that state-owned companies, which own about two-thirds of shares in publicly traded companies, would sell their stakes to profit from the sharp increase in value. The benchmark has declined 18 percent from its peak of 5,877.20 on Oct. 16.

Still, these companies may sell shares ``within limits'' when stock prices are too high, to remind investors of the risks involved in the stock market, the newspaper reported.

China Petroleum, Asia's biggest oil refiner, also known as Sinopec, advanced 0.77 yuan, or 3.7 percent, to 21.76. China United Telecommunications Corp., which controls the country's second-largest cell phone operator, jumped 0.92 yuan, or 9.4 percent, to 10.68.

Citic, Baoshan

Citic Securities Co., China's biggest publicly traded brokerage, climbed 2.99 yuan, or 3.8 percent, to 82.12. Baoshan Iron & Steel Co., China's biggest steelmaker, gained 0.72 yuan, or 4.5 percent, to 16.75.

Huaneng Power's shares climbed 0.34 yuan, or 2.5 percent, to 13.96. The company, China's second-largest power producer by market value, said it paid 1.52 billion yuan ($206 million) for a 9.1 percent stake in Shenzhen Energy Investment Co.

Shenzhen Energy climbed 0.43 yuan, or 1.9 percent, to 23.24.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, advanced 2.4 percent to 4,950.71. The Shenzhen Composite Index gained 2.1 percent to 1,337.38.

The following stocks rose or fell and the stock symbols are in parentheses after companies' names.

China Life Insurance Co. (601628 CH), the nation's biggest insurer, climbed 2.04 yuan, or 3.7 percent, to 57. China Life reported 183.8 billion yuan in premiums in the first 11 months of this year, without providing any year-earlier figures.

China Minsheng Banking Corp. (600016 CH), the nation's only privately controlled lender, added 0.20 yuan, or 1.4 percent, to 14.48. Minsheng Banking said it's reorganizing its operations to become more customer-oriented and efficient as competition in the industry intensifies. The lender will split corporate banking into five units specializing in real estate, energy, transportation, metallurgy and institutions, the Beijing-based company said in a statement today.

-- Editor: Richard Frost, Sam Waite

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

Last Updated: December 18, 2007 23:28 EST