China’s stocks rose for a fourth day, paced by telecommunication and consumer-staple companies, amid speculation lawmakers will announce economic-reform measures during an annual policy meeting this week.
China United Network Communications Ltd. (600050) jumped the most since October and state-owned Shanghai Friendship Group Incorporated Co. surged 9 percent. Surveillance-equipment makers Zhejiang Dahua Technology Co. (002236) and Hangzhou Hikvision Digital Technology Co. climbed after a deadly train station in Kunming boosted speculation demand for such devices will rise.
The Shanghai Composite Index (SHCOMP) rose 0.9 percent to 2,075.24 at the close, the most since Feb. 19. Investors will be watching the National People’s Congress meeting for clues on the next steps to fix local-government finances, charge market prices for natural resources, rein in shadow-banking risks and open up state businesses to private investment. Policy makers will also announce an economic growth target, as declining gauges of manufacturing add to signs the nation’s expansion is slowing.
“There is speculation the upcoming NPC meetings will announce reforms,” said Wu Kan, a money manager at Dragon Life Insurance Co., which oversees about $3.3 billion. “The impact of the factory data is limited because the market already expects the economy to remain weak.”
The CSI 300 Index rose 0.5 percent to 2,190.37. The Hang Seng China Enterprises Index (HSCEI) retreated 1.5 percent. The Shanghai Composite is valued at 7.7 times 12-month projected earnings, compared with the five-year average multiple of 12.2, according to data compiled by Bloomberg. Trading volumes were 25 percent above the 30-day average.
The meeting of the legislature, the first to be overseen by President Xi Jinping and Premier Li Keqiang, comes as leaders pledge to give markets a “decisive” role in the economy.
The purchasing managers’ index from HSBC Holdings Plc and Markit Economics dropped to a seven-month low of 48.5, the companies said today. A similar gauge from the government with a larger sample size fell to 50.2, the lowest since June, a report showed March 1. Numbers above 50 signal expansion.
A gauge of telecom companies climbed 4 percent, the most among 10 groups in the CSI 300. China United, which controls the nation’s second-largest mobile phone operator, rallied 6.5 percent to 3.26 yuan. ZTE Corp. (000063), the second-biggest phone-equipment maker, advanced 2.4 percent to 13.46 yuan.
Shanghai Friendship Group surged to 9.49 yuan, leading gains by companies on the consumer-staple measure. Shanghai Pharmaceuticals Holding Co. gained 5.1 percent to 14.55 yuan.
Zhejiang Dahua climbed 3.6 percent to 31.30 yuan. Hangzhou Hikvision added 4.1 percent to 22.90 yuan. Netposa Technologies Ltd. (300367) advanced 8 percent to 114.20 yuan.
At least 33 people died in knife attacks by assailants at a train station in Kunming. Local officials said evidence at the scene showed it was a terrorist attack orchestrated by Xinjiang separatist forces, the Xinhua News Agency reported yesterday.
China’s benchmark money-market rate slid to a nine-month low on speculation suspected intervention by the central bank to weaken the currency boosted cash supply. The seven-day repurchase rate slid 75 basis points to 2.78 percent, according to a fixing published by the National Interbank Funding Center. That’s the lowest level since May 15. The rate has dropped 247 basis points, or 2.47 percentage points, this year.
The yuan weakened 1.4 percent against the dollar in February, the biggest monthly drop on record, amid speculation the central bank wants greater two-way volatility in the currency.
To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at email@example.com