Nov. 4 (Bloomberg) -- The Bloomberg China-US 55 Index rose to a one-week high, led by China Life Insurance Co. and Baidu Inc., as U.S. stocks advanced after Greece moved closer to accepting a bailout and the European Central Bank unexpectedly cut interest rates.
The measure of the most-traded U.S.-listed Chinese companies gained 0.3 percent to 102.73, the highest since Oct. 27. China Life, the nation’s biggest insurer, rose 5.1 percent while its Shanghai-traded shares soared to a three-month high after Sinolink Securities recommended the industry as likely to benefit from a market rebound. Baidu, the nation’s most popular online search engine, rose before Groupon Inc.’s trading debut today.
The Shanghai Composite Index climbed 0.2 percent to 2,508.09 yesterday as a decline in China’s purchasing managers’ index of non-manufacturing industries spurred speculation that China may loosen monetary policy to support growth. ECB officials yesterday unanimously lowered the benchmark interest rate by 25 basis points to 1.25 percent as it sees “slow growth heading toward a mild recession.”
“We are expecting at this stage the bailout package to go through,” Lorraine Tan, director of Asia equity research at Standard & Poor’s, said in a Bloomberg Television interview from Hong Kong. “Our strategy is to stay positive in markets where there are good domestic stories, we’re talking mainly about China and Indonesia.”
No Greek Referendum
The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., advanced 1.7 percent to $38.07.
China Life’s ADRs rose $2.06 to $42.33, the highest level since Aug. 17. Each ADR represents 15 common shares. The shares traded in Shanghai rose 3 percent to 18.04 yuan, or the equivalent of $2.84.
Greek Finance Minister Evangelos Venizelos, speaking to party lawmakers in Parliament in Athens, said the nation won’t hold a referendum. Just hours after saying Greeks need to decide on whether their future is in the euro, Greek Prime Minister George Papandreou said the country belongs in the currency bloc.
Groupon, the Chicago-based online-coupon provider, stopped taking orders for its initial public offering a day earlier than planned because of demand for the shares, two people familiar with the sale told Bloomberg News.
Purchasing Managers’ Index
The measure published by the China Federation of Logistics and Purchasing yesterday fell to 57.7 in October from 59.3 a month earlier.
“A shift has started towards measured easing, in the face of the deepening debt crisis overseas and the emergence of more pockets of stress on the domestic front,” Xianfang Ren, a senior economist at HIS Global Insight said in a research note yesterday. “The government is resorting more to tax cuts than public spending.”
China said this week that it will lower the threshold for payment on value-added and business taxes for small companies. It has also announced measures to help small businesses through easier access to bank loans.
Renren Inc., the Chinese social-networking site that completed an $855 million initial public offering in May, dropped 6.8 percent to a two-week low of $5.74, having lost as much as 14 percent earlier. Analysts surveyed by Bloomberg forecast the company may report declines in profit for the third quarter next week.
“Investors are not optimistic about Renren’s profit growth in the next several quarters,” said Echo He, a senior China analysts at Maxim Group LLC in New York. “The company has high costs for both research and marketing, as it focuses on growth.”
Online video sharing companies Youku.com Inc., Tudou Holdings Ltd. and Qihoo 360 Technology Co., developer of China’s most-popular computer security software, also fell.
Youku’s ADRs slid 2 percent to $20.35, and Tudou fell 5.1 percent to $15, the lowest in almost four weeks. Qihoo’s ADRs sank 7.9 percent to $16.69, the lowest level since Oct. 7.
To contact the reporter on this story: Belinda Cao in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com