China’s stocks rose, ending the longest losing streak for the benchmark index since December 2008, as investors speculated losses were excessive.
Huaneng Power International Inc. (600011), the listed unit of China’s largest power group, advanced the most in three weeks after a government official said electricity prices will be raised. China Shenhua Energy Co. led energy companies higher as coal and oil prices increased. Poly Real Estate Group Co. slid to a five-month low after the Shanghai Daily said the central bank may boost interest rates as soon as this weekend.
The Shanghai Composite Index rose 37.1, or 1.4 percent, to 2,743.47 at 3 p.m. close, the most since March 7 and snapping an eight-day, 5.8 percent retreat. The CSI 300 Index added 1.6 percent to 3,001.56.
“The power price increase may help lift market sentiment,” said Wu Kan, a fund manager at Dazhong Insurance Co., which oversees $285 million. “The move should go some way to easing power shortages and removing some pressure on production capacity.”
The government will raise retail electricity prices starting next month, the first increase in more than a year, to curb demand and boost power generation as the nation battles a shortage that may be the worst in history.
The Shanghai Composite has lost 5.8 percent this month, the biggest loss since June 2010, on concern growth in the world’s second-largest economy is slowing after the central bank raised the reserve-requirement ratio for banks 11 times and boosted interest rates four times to cool inflation. The gauge has plunged 10 percent from this year’s high on April 18, a sign to some investors that the market has entered a correction.
--Irene Shen. Editor: Richard Frost
To contact Bloomberg News staff for this story: Irene Shen in Shanghai at +86-21-6104-3049 or Ishen4@bloomberg.net
To contact the editor responsible for this story: Darren Boey at email@example.com