Chinese stocks rose for the first time in three days as an unexpected increase in Japan’s asset- purchase program boosted commodities and fueled speculation that central banks will revive the global economy.
Zijin Mining Group Co. jumped 4.9 percent and Jiangxi Copper Co. surged 4 percent as metal prices advanced. Pacific Securities Co. (601099) paced an advance by brokerages after the Shanghai Securities News said regulators will push for market reforms. Jiangsu Yanghe Brewery Joint-Stock Co. fell to a seven-month low after Chengdu Evening News reported a shareholder sold stock.
“Investors are using Bank of Japan’s asset purchase as an excuse to buy stocks,” said Li Jun, a strategist at Central China Securities in Shanghai. “This is a short-term effect. Fed’s QE3 didn’t have such a big impact, let alone this. Sentiment to stocks are still low with the weak economy.”
The Shanghai Composite Index (SHCOMP) added 0.4 percent to 2,067.83 at the close. The CSI 300 Index (SHSZ300) gained 0.5 percent to 2,246.24. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong rose 1.8 percent. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, slid 0.9 percent in New York yesterday.
The Bank of Japan expanded its asset-purchase fund by 10 trillion yen ($126 billion), seeking to counter an increasing danger of contraction in the world’s third-largest economy. The BOJ joins counterparts from the Federal Reserve to the European Central Bank in taking steps to bolster growth.
A gauge tracking materials producers climbed 2.3 percent, the most among the CSI 300’s 10 industry groups. Zijin Mining jumped 4.9 percent to 4.08 yuan, the highest since June 18. Jiangxi Copper surged 4 percent to 22.75 yuan.
Gold rose 0.3 percent to its highest level since February, while copper advanced 1.1 percent in London.
Pacific Securities added 1.3 percent to 5.60 yuan. Northeast Securities Co. increased 2 percent to 15.66 yuan.
China will push for 15 major capital market reforms during the current five-year plan, Shanghai Securities News reported. The reforms include increasing the development of debt markets and stable development of a futures market, the Shanghai Securities News said, citing an unidentified China Securities Regulatory Commission official.
Yanghe Brewery lost 2.7 percent to 117.20 yuan, the lowest close since Feb. 21, Nantong Zongyi Investment Co. sold 1.85 million shares in the liquor maker, Chengdu Evening News reported, citing its own statistics. Calls made by Bloomberg News to Cong Xuenian, Yanghe’s board secretary, were unanswered.
Swap traders have halved expectations for the scale of China’s interest-rate cuts in the coming year as policy makers signal concern that global monetary easing will reignite inflation.
Swap derivatives reflect bets the People’s Bank of China will lower its one-year deposit rate of 3 percent by 44 basis points, compared with expectations a month ago for a 90 basis point reduction, according to data compiled by Bloomberg. The central bank has refrained from acting since July 6, when it reduced by 25 basis points for the second time in a month. The Federal Reserve pledged last week to keep its benchmark rate near zero until at least mid-2015.
U.S. quantitative easing will hamper the decision-making ability of authorities in emerging economies and “do serious damage” to the global economy, Zhang Monan, an economic researcher at the State Information Center, wrote in the China Daily newspaper today.
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., retreated 0.6 percent in its second day of declines to $34.52.
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