Feb. 4 (Bloomberg) -- China's benchmark stock index rose by a record 8.3 percent after the government allowed the sale of new stock funds and increased efforts to restore power supplies and transport links after the worst snowstorm in more than 50 years.

Aluminum Corp. of China Ltd. gained the most in five months and led a rally in commodities producers after its parent bought a stake in Rio Tinto Group. Citic Securities Co., the nation's largest brokerage, advanced as the stock regulator approved two new stock funds following the CSI 300 Index's worst weekly decline since the measure was compiled in April 2005.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, climbed 378.18 to 4,950.12 at the 3 p.m. close, the biggest fluctuation among indexes included in global benchmarks. All of the measure's 300 members rose, apart from 15 that were suspended or unchanged.

``We are probably already at a level where the regulators don't want to see a further decline in stocks,'' said Fan Dizhao, who helps manage the equivalent of $8.3 billion at Guotai Asset Management Co. in Shanghai.

Aluminum Corp. of China, the nation's biggest maker of the lightweight metal and also called Chalco, jumped 2.94 yuan, or by the 10 percent daily cap, to 32.34. The company's parent, known as Chinalco, and Alcoa Inc. bought an estimated 9 percent stake in Rio Tinto.

China Shenhua Energy Co. gained after a newspaper said its parent plans to buy a stake in Fortescue Metals Group Ltd.

An index of raw-materials producers rallied 8.9 percent for the biggest advance among 10 industries in the CSI 300 Index. Hunan Valin Steel Tube & Wire Co. gained 10 percent to 12.60 yuan, rebounding from a 16 percent slide last week after the Chinese steelmaker said power shortages had disrupted production.

Easing Storms

More than three weeks of snow in central and southern China brought transport networks to a standstill, killed at least 60 people and caused economic losses of at least 53.8 billion yuan ($7.5 billion). Snow and freezing rains in southern and eastern China are forecast to give way to clearer weather before the Chinese New Year begins in three days, the China Meteorological Administration said.

The storms have led several companies to warn profits may drop, prompting speculation authorities would act to boost growth. Stocks had more than doubled last year before the impact of six interest rate increases and a clampdown on bank lending.

Brokerages Advance

Citic Securities climbed 5.72 yuan, or 8.3 percent, to 75.03, its biggest gain since Nov. 2. The stock plunged 24 percent last month, compared with a 14 percent decline on the benchmark index. Haitong Securities Co., the nation's second- biggest publicly traded brokerage, surged 3.64 yuan, or 8.1 percent, to 48.65, its steepest advance since Oct. 24.

China's stock regulator approved two new stock funds, ending a five-month freeze, the Shanghai Securities News reported on Feb. 2. CCB Principal Asset Management Co. and China Southern Fund Management Co. will start closed-end funds, raising as much as 14 billion yuan ($1.95 billion), the newspaper said.

CCB Principal received approval to offer a 6-billion yuan fund, Beijing-based spokeswoman Ruan Yi said in a phone interview today. The regulator hasn't set a date for fundraising to begin, she said. China Southern Fund Management Co. also won approval to offer an 8-billion yuan fund, said Zeng Yihan, the firm's Shenzhen-based spokeswoman. Sales will begin after this week's Lunar New Holidays, Zeng said.

Shanghai Pudong Development Bank Co. and China Vanke Co. surged after the government said developers could borrow more to building cheap housing. Air China Ltd. and China Southern Airlines Co. rose after Citigroup Inc. said earnings at airlines likely climbed last year.

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

Pudong Bank (600000 CH), the Chinese partner of Citigroup Inc., jumped 4.72 yuan, or by the 10 percent daily permitted limit, to 51.95. Vanke (000002 CH), the country's largest publicly traded developer, added 2.03 yuan, or 7.5 percent, to 29.03.

Developers of cheap housing will now have access to loans from a wider range of lenders, be required to put less of their own funds into projects and be eligible for discounted interest rates, the banking regulator and People's Bank of China said in a joint statement on their Web sites today.

China Merchants Bank Co. (600036 CH), the nation's biggest dual-currency credit-card issuer, advanced 3.12 yuan, or 9.4 percent, to 36.28.

Shenhua Energy (601088 CH), the nation's largest coal producer, advanced 4.89 yuan, or 8.6 percent, to 61.61. Parent Shenhua Group Corp. and China Investment Corp., which manages $200 billion in sovereign funds, are in talks to buy a 15.85 percent stake in Perth-based Fortescue from Harbinger Capital Partners, the South China Morning Post reported.

Fortescue has been in talks with potential investors, Executive Director of Operations Graeme Rowley said by phone from Perth, without naming the parties.

Coal stocks also rose after thermal coal prices at Australia's Newcastle port surged past $100 a metric ton for the first time, rising 25 percent to $116.44 in the week ended Feb. 1, according to the globalCOAL NEWC Index.

China Coal Energy Co. (601898 CH), the nation's second- largest coal producer, surged 2.22 yuan, or the 10 percent daily limit, to 24.42. Yanzhou Coal Mining Co., the listed unit of China's fourth-biggest coal miner, climbed 1.84 yuan, or 10 percent, to 20.20.

Air China (601111 CH), the world's biggest airline by market value, climbed 2.04 yuan, or 10 percent, to 22.45. China Southern (600029 CH), the nation's biggest carrier by fleet size, gained 1.98 yuan, or 10 percent, to 21.79.

Airlines in China likely boosted earnings last year due to demand for air travel and better-than-expected pricing ability, Ally Ma, a Citigroup analyst wrote in a report today. The carriers may also be shielded from a possible recession in the U.S. because of their domestic focus, Ma wrote.

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

Last Updated: February 4, 2008 10:42 EST