China Stocks Rise Most in Two Weeks on Bank Profits; Beiqi Falls

China’s stocks rose, driving up the benchmark index the most in almost two weeks, as higher earnings at Industrial & Commercial Bank of China Ltd. overshadowed lower-than-estimated profit at PetroChina Co.

ICBC, the nation’s biggest listed lender, and Industrial Bank Co., part-owned by a unit of HSBC Holdings Plc, advanced among lenders. Yunnan Baiyao Group Co., a manufacturer of traditional Chinese medicines, climbed the most in three years on higher profit. PetroChina, the country’s biggest oil company, sank 0.7 percent. Beiqi Foton Motor Co. (600166), China’s largest commercial-vehicle maker, slumped the most in two months after reporting a loss.

The Shanghai Composite Index (SHCOMP) advanced 0.3 percent to 2,068.88 at the close, the biggest gain since Oct. 18. The gauge changed direction at least 12 times today. The gauge lost 0.8 percent this month on signs corporate earnings growth is declining. The CSI 300 Index (SHSZ300) added 0.7 percent to 2,254.82.

“Most of the negative factors from third-quarter earnings have been priced into stocks,” said Dai Ming, a fund manager at Hengsheng Hongding Asset Management Co. in Shanghai, which manages $190 million. “The long-term outlook of economic growth remains gloomy as investors don’t see a clear growth driver going forward.”

The Shanghai gauge is now within 3.1 percent of its low this year set on Sept. 26. It trades at 9.8 times estimated profit for 2012, compared with the 17.8 average multiple since Bloomberg began compiling the weekly data in 2006.

About 5.9 billion shares changed hands in the Shanghai Composite today, 22 percent lower than the daily average this year. Thirty-day volatility on the gauge was at 17.1, compared with the year’s average of 17.2.

Manufacturing Data

The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong gained 1 percent. Stock trading in the U.S. is due to resume today after a two-day closure because of Hurricane Sandy.

The National Bureau of Statistics and China Federation of Logistics and Purchasing are due to release an October manufacturing index tomorrow. The Purchasing Managers’ Index probably rose to 50.3 from 49.8 last month, according to the median estimate of 24 analysts in a Bloomberg survey. Fifty is the dividing line between expansion and contraction.

ICBC added 0.3 percent to 3.82 yuan. Net income rose 15 percent from a year earlier to a record 62.4 billion yuan ($10 billion) in the third quarter. That exceeded the 60.7 billion- yuan average estimate of 12 analysts surveyed by Bloomberg. Industrial Bank said profit for the third quarter increased 41 percent.

Industrial Bank

Industrial Bank advanced 1.3 percent to 12.40 yuan. The lender said profit for the third quarter increased 41 percent.

The combined profit at China’s four largest banks rose 15 percent in the third quarter, almost triple the amount at the top four U.S. banks and 3 percent more than the average analyst estimate compiled by Bloomberg.

A gauge of health-care stocks in the CSI 300 Index rose 2.2 percent, the most of 10 industry groups. Yunnan Baiyao climbed 7 percent to 65.50 yuan, its biggest gain since Oct. 23, 2009. Third-quarter profit increased 30 percent from a year earlier, the pharmaceutical company said in an exchange statement.

Sinotrans Air Transportation Development Co. (600270), a unit of China’s largest air shipper, surged by the 10 percent daily limit to 6.59 yuan. Net income for the third quarter jumped 61 percent, according to an exchange statement.

PetroChina fell 0.7 percent to 8.68 yuan. The oil producer said third-quarter profit fell 33 percent from a year earlier to 24.9 billion yuan because of refining losses and the cost of importing natural gas, the company said in a statement yesterday. That missed the 27.3 billion-yuan mean of eight analysts’ estimates compiled by Bloomberg.

Corporate Earnings

Beiqi Foton slid 4.6 percent to 5.83 yuan, the biggest slump since Aug. 27, after the carmaker posted a third-quarter loss of 278 million yuan.

Some 947 companies in the Shanghai Composite have reported third-quarter profits with an average drop of about 5 percent from a year earlier, according to data compiled by Bloomberg. That compared with a 0.3 percent growth in the second quarter. Publicly traded companies are meant to complete third-quarter earnings announcements by the end of today.

--Zhang Shidong. Editors: Darren Boey, Chan Tien Hin

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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