Dec. 3 (Bloomberg) -- China’s stocks rose by the most in two weeks, led by financial and raw-material companies, amid evidence the government is buying shares to support the market.

China Construction Bank Corp., the nation’s second-largest bank, jumped 5.2 percent after China’s $200 billion sovereign wealth fund increased its stake in the lender. China Shenhua Energy Co., the nation’s largest coal producer, climbed 8.3 percent as domestic coal prices halted their slump.

“You shouldn’t be pessimistic about the market now, as the government is starting to support it,” said Wang Peng, a fund manager at First Trust Fund Management Co. in Shanghai, which oversees the equivalent of $2.1 billion. “Most negative factors have been priced in.” Wang said he is buying shares and favors companies in electric equipment manufacturing and infrastructure.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China’s two exchanges, gained 84.04, or 4.5 percent, to 1,952.67 at the close, the most since Nov. 19. All 10 industry groups advanced and only two stocks fell on the 300- member gauge.

Yunnan Copper Industry Co., China’s third-biggest producer of the metal, jumped by the 10 percent daily limit after denying a newspaper report alleging its managers had benefited from deals with affiliated companies.

China’s benchmark index has risen 16 percent since the government pledged on Nov. 9 to implement a 4 trillion yuan ($581.1 billion) economic stimulus package. For the year, the gauge is down 63 percent on concern shrinking industrial expansion and slowing exports will stifle economic growth.

National Fund

The National Social Security Fund spent 10 billion yuan buying mainland shares priced in yuan last month to support the country’s stock market, the South China Morning Post said. The fund, which had 516.2 billion yuan in assets at the end of last year, believes the stock market has reached a bottom, the report said, citing sources it didn’t identify.

China will encourage more institutional participation by insurance companies and pension funds in the stock market, the China Securities Journal reported today, citing Shang Fulin, chairman of the China Securities Regulatory Commission. Institutional investors held shares accounting for more than 50 percent of the market value of stock available for public trading by the end of November, it said.

Construction Bank gained 5.2 percent to 4.25 yuan. Parent Central Huijin Investment Co., a unit of the nation’s sovereign wealth fund, had acquired 70.8 million of the bank’s shares as of Nov. 28, Construction Bank said in a statement today. Separately, the bank plans to increase lending by as much as 15 percent next year, the Financial News reported.

Central Huijin

Central Huijin said on Sept. 19 that it will increase its holdings in the nation’s three biggest listed banks. Industrial & Commercial Bank of China Ltd., the nation’s biggest listed lender, added 2.9 percent to 3.87 yuan. Bank of China Ltd., the No. 3, gained 3.2 percent to 3.23 yuan.

Yunnan Copper surged by the daily maximum 10 percent to 9.69 yuan. The company’s plan to buy affiliates from its parent last year followed government guidelines, it said. A report in the 21st Century Business Herald that said some managers had improperly gained from transactions is untrue, Yunnan Copper said today.

Shenhua advanced 8.3 percent to 18.76 yuan. Pingdingshan Tianan Coal Mining Co., the listed unit of China’s fifth-largest coal producer, surged 10 percent to 13.97 yuan. Shanxi Coking Co., the largest publicly traded coke producer in China, jumped 10 percent to 5.10 yuan.

Qinhuangdao Price

The price of coal with an energy value of 6,000 kilocalories per kilogram at Qinhuangdao port was unchanged at 680-700 yuan a metric ton in the week ended Dec. 1, data from the China Coal Transport and Distribution Association showed. It has dropped 37 percent since reaching a record in July.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, climbed 4 percent to 1,965.41. The Shenzhen Composite Index added 3.9 percent to 584.43.

The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.

Telecommunications-related stocks: China will issue three licenses for high-speed mobile phone services by the end of the year, state-owned China National Radio reported yesterday, without saying where it got the information. The nation will invest a total of 800 billion yuan ($117 billion) to provide so- called third-generation, or 3G, mobile services, it said.

China United Telecommunications Corp. (600050 CH), which controls the nation’s second-largest cell phone operator, rose 0.19 yuan, or 3.5 percent, to 5.59. ZTE Corp. (000063 CH), China’s second-biggest phone-equipment maker, advanced 1.92 yuan, or 8.3 percent, to 25.17.

China Merchants Property Development Co. (000024 CH), a Shenzhen, China-based builder, added 0.62 yuan, or 4.4 percent, to 14.67. The developer will sell some assets to ARA Asset Management Pte, set up by billionaire Li Ka-Shing’s Cheung Kong Holdings Ltd., for 1.6 billion yuan.

PetroChina Co. (601857 CH), the nation’s biggest oil company, advanced 0.28 yuan, or 2.5 percent, to 11.40. PetroChina plans to increase output at Changqing field by 20 percent next year to meet rising energy demand, parent company China National Petroleum Corp. said in a statement today.

Shandong Nanshan Aluminum Co. (600219 CH), China’s second- largest aluminum products maker, added 0.21 yuan, or 3.2 percent, to 6.70. The company will double primary metal capacity next year, General Manager Liu Haishi said in Sanyan today.

Shanghai Pudong Development Bank Co. (600000 CH), the Chinese partner of Citigroup Inc., rose 0.83 yuan, or 6.9 percent, to 12.90. Pudong Bank said it agreed to buy 18 percent of Laishang Bank to boost its presence in Shandong province and to expand beyond its hometown.

Xi’an Typical Industries Co. (600302 CH), a sewing machine manufacturer, gained 0.10 yuan, or 3.3 percent, to 3.16. The stock was rated “buy” in initial coverage at Orient Securities Co.

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

Last Updated: December 3, 2008 04:02 EST