China’s Stocks Rise First Time in Three Days; Automakers Rally

China’s stocks rose for the first time in three days as gains by automakers and Jiangxi Copper Co. overshadowed losses by liquor-makers.

Chongqing Changan Automobile Co. rose the most in three weeks after an auto dealer group said industry sales will pick up. China Communications Construction Co. jumped 5.5 percent after earnings topped estimates, while Jiangxi Copper climbed 1.5 percent as profit rose. Kweichow Moutai Co., the maker of high-end spirits, retreated 1.8 percent.

The Shanghai Composite Index (SHCOMP) closed 0.2 percent higher at 2,301.26 after rising as much as 1.1 percent and falling 0.4 percent. The CSI 300 Index (SHSZ300), which tracks stocks in Shanghai and Shenzhen, advanced 0.3 percent to 2,583.53. Hong Kong’s Hang Seng China Enterprises Index climbed 1 percent.

“There’s fluctuation in the short term on liquidity concerns and amid the release of company earnings,” Tang Yonggang, an analyst at Hongyuan Securities Co. in Beijing, said by phone today.

The Shanghai Composite has retreated 5.5 percent from a Feb. 6 peak on concern government steps to cool property prices will drag on economic growth and as company earnings trailed estimates. The measure is valued at 9.4 times projected 12-month earnings, compared with the seven-year average of 15.8, according to data compiled by Bloomberg.

Trading volumes in the Shanghai Composite were 15 percent lower than the 30-day average for this time of day, while its 30-day volatility was near the highest level in 13 months.

IPO Concerns

Stocks pared earlier gains amid concern regulators will restart initial public offerings, Xu Shengjun, an analyst at Jianghai Securities Co. in Shanghai, said by phone today. The China Securities Regulatory Commission suspended issuance of IPO shares in October, as investors’ appetite for new stocks waned amid equity-market declines that drove the Shanghai Composite to near four-year lows.

The CSRC is likely to resume IPO sales next month, with about 60 companies receiving written approval, International Finance News reported today, citing unidentified people. International Finance News is run by the People’s Daily, a mouthpiece of the Chinese communist party.

A gauge tracking consumer discretionary shares rose 0.9 percent. Changan Automobile gained 5.5 percent to 9.35 yuan, the biggest gain since March 6. FAW Car Co. gained 2.5 percent to 8.32 yuan. The auto market may have picked up in March amid warmer weather and new car models, the China Automobile Dealers Association said.

Earnings Reports

China Communications Construction jumped 5.1 percent to 4.93 yuan, the biggest advance since Feb. 5. The company reported full-year net of 12.2 billion yuan ($1.96 billion), compared with the average estimate of 16 analysts surveyed by Bloomberg for 11.3 billion yuan.

Jiangxi Copper Co. advanced 1.5 percent to 22.95 yuan. Net income rose 10 percent in the second half of last year.

Sixty-three percent of Shanghai Composite companies posted annual profit that missed estimates, according to data on 193 earnings reports compiled by Bloomberg since Jan. 1.

An index tracking consumer staples fell 1.4 percent, taking its decline this year to 2.8 percent. Kweichow Moutai lost 1.8 percent to 166.79 yuan. The stock has tumbled 20 percent in 2013 amid President Xi Jinping’s crackdown on extravagant spending by officials.

The iShares FTSE China 25 Index Fund (FXI), the largest Chinese exchange-traded fund in the U.S., rallied 1.3 percent to $37.31 in New York yesterday, the highest close since March 15.

-- With assistance from Zhang Shidong in Shanghai. Editors: Richard Frost, Chan Tien Hin

To contact Bloomberg News staff for this story: Weiyi Lim in Singapore at wlim26@bloomberg.net

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

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