China’s stocks rose the most in almost two weeks after the nation’s trade expanded more than economists estimated and easing inflation provided leeway to policymakers to ease monetary policy.
China Cosco Holdings Co. (601919), the world’s largest operator of dry-bulk ships, climbed 3.8 percent on prospects increasing imports and exports will boost demand for marine transport. SAIC Motor Corp. (600104) led an advance for automakers after passenger-car sales beat analyst expectations. China Dongfanghong Spacesat Co. jumped the most since November 2010 after the Xinhua News Agency said the government will launch a manned rocket for a docking mission this month.
“The May economic data are a little better than expected and the government will continue to loosen policies given these figures are still at relatively weak levels,” Dai Ming, a fund manager at Shanghai Kingsun Investment Management & Consulting Co., said by phone today.
The Shanghai Composite Index (SHCOMP) rose 24.41 points, or 1.1 percent, to 2,305.86 at the close, the biggest gain since May 29. The CSI 300 Index (SHSZ300) advanced 1.3 percent to 2,558.26. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 0.4 percent in New York on June 8.
The Shanghai measure slid 3.9 percent last week, the most since the five days ended Dec. 16, as concerns about a deepening slowdown overshadowed the first cut in lending and deposit rates since 2008. Thirty-day volatility on the gauge was at 15.77, compared with this year’s average of 18.66. About 6.8 billion shares changed hands on the index on June 8, 24 percent lower than the daily average this year.
Exports climbed 15.3 percent in May to a record, the Beijing-based customs bureau said yesterday, exceeding all 29 forecasts in a Bloomberg News survey. Imports rose 12.7 percent compared with estimates for a 5.5 percent gain.
China’s trade report is “surprisingly reassuring,” Michael Kurtz, Hong Kong-based global head of equity strategy at Nomura Holdings Inc., said in a Bloomberg television interview today. “After the rate cut last week, we were all primed for a very weak set of data.”
Inflation slowed to 3 percent, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent, lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, less than the estimate for a 14.2 percent gain.
China’s “surprising” trade data doesn’t change prospects for more policy easing given signs of easing consumer-price inflation, according to Goldman Sachs Group Inc.
“The fact that CPI came down faster than expected allows for more policy flexibility,” Helen Zhu, chief China equity strategist at Goldman Sachs, said in a Bloomberg television interview in Hong Kong. “The trade data is a little bit surprising indeed but we don’t think that will seriously sway the policy makers’ intentions.”
A measure of consumer staples stocks on the CSI 300 slid 0.3 percent today, the most among the 10 industry groups. Kweichow Moutai Co., China’s biggest producer of baijiu liquor by market value, lost 1.4 percent to 235.55 yuan. Wuliangye Yibin Co. (000858), the second largest, fell 1.1 percent to 32.19 yuan.
The Shanghai Composite has advanced 4.8 percent this year. Stocks in the measure are valued at 9.97 times estimated earnings, compared with the five-year average of 17.8, according to weekly data compiled by Bloomberg.
The Shanghai index is poised to gain a further 10 percent from current levels, spurred by government measures to boost the economy including easier monetary policies and increasing infrastructure spending, Gao Ting, chief China strategist at UBS Wealth Management, said in an interview in Shanghai today.
The MSCI Asia Pacific Index (MXAP) advanced 1.9 percent today after Spain asked for a bailout of as much as 100 billion euros ($126 billion) to help shore up its banks, fanning expectations European leaders will step up effort to counter the debt crisis.
“Spain is a very important and big member of the euro zone and policy makers won’t abandon Spain,” Kingsun’s Dai said.
SAIC, China’s largest carmaker, rose 2.3 percent to 14.93 yuan. Great Wall Motor Co. (601633), China’s biggest pickup truck maker, advanced 4.3 percent to 17.28 yuan. FAW Car Co., which makes cars with Volkswagen AG, added 2.7 percent to 12.21 yuan.
Deliveries, including multipurpose and sport-utility vehicles, rose by 22.6 percent to 1.28 million units last month, Chen Shihua, statistics department head at the China Association of Automobile Manufacturers, said over the weekend at a briefing in Beijing. That beat the 1.2 million average of seven analyst estimates compiled by Bloomberg.
China Dongfanghong led gains for aerospace companies, jumping 6.6 percent to 13.52 yuan. China will send three astronauts into orbit later this month to perform the first manned docking with its Tiangong-1 space module, Xinhua reported over the weekend.
Aerospace Communications Holdings Co. surged 6.3 percent to 9.15 yuan. Beijing Aerospace Changfeng Co. (600855) added 3.8 percent to 9.47 yuan.
Chinese stocks traded in New York rose for the first time in six weeks. The Bloomberg China-US Equity Index of the most- traded Chinese companies in the U.S. advanced 3.5 percent last week, snapping a five-week slump that sent the gauge to an eight-month low on June 4.
The iShares FTSE China 25 Index Fund (FXI), the biggest U.S.- listed China exchange-traded fund, retreated 2.8 percent to $32.81 on June 8, trimming its gain last week to 0.4 percent.
--Zhang Shidong. Editors: Allen Wan, Ravil Shirodkar
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