Chinese Stocks Rise on Improving Export Growth, Inflation Data

China’s stocks rose for the first time in three days after export growth exceeded economists’ estimates and inflation eased more than expected.

Hangzhou HIK-Vision Digital Technology Co. led technology companies to the biggest advance among industry groups. Yonker Environmental Protection Co. rallied the most in three weeks to pace gains for environmental-protection companies. China Shenhua Energy Co. slumped for a third day on concern worsening pollution may reduce reliance on the fuel.

The Shanghai Composite Index (SHCOMP) advanced 0.1 percent to 2,238.20 at the close, as two stocks climbed for every one that fell. Improving data spur optimism Premier Li Keqiang will be able to implement reforms to increase the role of markets in the economy and meet a goal of reducing dependence on exports in favor of domestic consumption.

“Better-than-estimated data are boosting stocks,” said Mao Sheng, an analyst at Huaxi Securities Co. in Chengdu. “However, any gains these few weeks won’t be huge and gains could pare because we are faced with tighter liquidity at the end of the year. We need a lot of good news for a surge.”

The CSI 300 Index retreated 0.1 percent to 2,450.87, while the Hang Seng China Enterprises Index advanced 0.5 percent.

The Shanghai Composite has climbed 4.8 percent since the government vowed on Nov. 15 to allow more private investment in state-controlled industries and loosen its one-child policy in the most sweeping reforms in two decades. Trading volumes in the index were 16 percent below the 30-day average, according to data compiled by Bloomberg.

Exports Gain

China’s outbound shipments rose 12.7 percent from a year earlier, data from the General Administration of Customs showed yesterday in Beijing, topping the median economists’ projection of 7 percent. Import gains of 5.3 percent compared with the forecast of 7 percent. The surplus of $33.8 billion was the biggest since January 2009. The export data follow a crackdown that began in May after trade figures were inflated for several months on fake invoicing used to disguise capital inflows.

“The accelerating export growth might be mainly a result of an improved global economy and to some extent a lower comparison base,” Lu Ting, economist at Bank of America Corp., wrote in a report. “But we are concerned that a rising yuan versus the dollar and rising bond yields could once again entice capital inflows via over-reporting of exports.”

The consumer-price index rose 3 percent from a year earlier, the National Bureau of Statistics said. That compares with the 3.1 percent median estimate of 43 analysts surveyed by Bloomberg News and a 3.2 percent increase in October. The producer-price index fell 1.4 percent, compared with a median projection for a 1.5 percent decline.

Energy Stocks

A measure of technology companies in the CSI 300 added 1.1 percent, the biggest gain among 10 industry groups. Hangzhou HIK-Vision, which makes video-surveillance equipment, surged 4 percent to 22.69 yuan.

Yonker Environmental Protection jumped 4.9 percent to 28.67 yuan. Sound Environmental Resources Co. added 1.5 percent to 34.98 yuan. China Shenhua, the biggest coal producer, declined 0.5 percent to 16.97 yuan. Guanghui Energy Co. slumped 1.8 percent to 9.65 yuan.

Levels of PM2.5 air pollution in Shanghai were 12 times that recommended by the World Health Organization today. The reading for PM2.5 air pollution was 309.5 micrograms per cubic meter as of noon, the city’s environmental monitoring center said on its website. The particles that are smaller than 2.5 microns in diameter are more dangerous than other particulate matter, according to the WHO.

Shanghai Pollution

“Bad pollution in Shanghai recently prompted investors to be concerned if there would be changes to energy use in the future,” Li Xin, an analyst at Masterlink Securities, said on Dec. 6.

The trade and inflation figures kick off a series of November data releases, with the statistics bureau set to report tomorrow on industrial production and retail sales, along with fixed-asset investment for the first 11 months of the year. Industrial output probably grew 10.1 percent in November from a year earlier, compared with a 10.3 percent increase the previous month, another survey showed.

Chinese leaders are expected to provide more details on new economic policies and unveil growth targets at a conference this month. China may set its 2014 economic growth target at about 7.5 percent, according to a front-page commentary in the China Securities Journal today.

The Shanghai index is valued at 8.7 times projected 12-month earnings, while the MSCI Emerging Markets Index has a multiple of 10.6, according to data compiled by Bloomberg.

To contact the reporter on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.