April 22 (Bloomberg) -- China’s benchmark stock index rose for the first time in four days as a rally for financial and phone companies overshadowed losses for technology shares.
China United Network Communications Ltd. gained the most in six weeks after Tencent Holdings Ltd.’s QQ.com reported that the company will provide mobile-phone services for Tesla vehicles in China. China Citic Bank Corp. and Industrial Bank Co. advanced more than 3 percent. Leshi Internet Information & Technology Co. tumbled 7.5 percent as a measure of smaller companies slumped the most in three weeks.
The Shanghai Composite Index rose 0.3 percent to 2,072.83 at the close. The ChiNext index plunged 2 percent, the most since March 28. The China Securities Regulatory Commission has posted initial public offering prospectuses for 46 companies on its website since April 18, spurring concern these companies will sell new shares soon.
“The market is expecting some growth-stabilizing measures should second-quarter economic growth slow further,” said Wu Kan, a fund manager at Shanghai-based Dragon Life Insurance Co., which oversees about $3.3 billion. “The market is consolidating after yesterday’s big correction as a possible IPO restart is weighing on market sentiment.”
The People’s Bank of China announced a 2 percentage point reduction in reserve-requirement ratios at some rural commercial banks after the market closed. The cuts, which were signaled last week, will have limited effects, Bank of America Corp. said in an April 16 report.
The CSI 300 Index added 0.4 percent to 2,196.80 today, while the Hang Seng China Enterprises Index declined 0.4 percent as trading resumed in Hong Kong following a two-day holiday. The Bloomberg China-US 55 Index fell 0.3 percent yesterday.
The Shanghai Composite has dropped 2 percent this year amid concern decelerating economic growth will curb earnings. Data this month showed growth in gross domestic product slowed to 7.4 percent in the first quarter from 7.7 percent in the previous period, compared with a 7.5 percent annual target. Industrial production in March and fixed-asset investment for the first three months of the year also trailed estimates.
HSBC Holdings Plc and Markit Economics are scheduled to release tomorrow a preliminary reading of China’s manufacturing index for April, known as the flash PMI. The gauge probably rose to 48.3 from 48 a month earlier, according to the median estimate of Bloomberg surveys. A reading below 50 indicates contraction.
China United, which controls the nation’s second-largest cell phone operator, added 2.6 percent. Its unit China Unicom (Hong Kong) Ltd. will provide third- and fourth-generation services for Tesla vehicles sold in China, QQ.com reported, without citing anyone. A call to Joanna Rui, a Hong Kong-based investor relations official for China Unicom, went unanswered.
Citic Bank gained 4.3 percent to 4.90 yuan. Industrial Bank Co. advanced 3.3 percent to 10.23 yuan.
China needs to regulate and restrict online finance in the near term, Yin Jianfeng, vice head of the Institute of Finance and Banking under the Chinese Academy of Social Sciences, wrote in the Shanghai Securities News today.
Tighter regulation, possibly including capital requirements and fundraising limits, could make it easier for banks to fend off Alibaba’s Yu’E Bao, which has attracted 600 billion yuan ($96.2 billion) of deposits, according to Bloomberg Industries.
The securities regulator may start the next review meeting for IPOs in early May, the Shanghai Securities News reported today, citing an unidentified brokerage employee. The CSRC halted new share approvals in January after restarting them following a more than a one-year suspension.
Mobile gaming provider Ourpalm Co. paced declines for ChiNext companies, sliding 7.1 percent. Leshi Internet Information fell the most since Jan. 16. Beijing E-Hualu Information Technology Co. tumbled 5.5 percent while Nanfeng Ventilator Co. lost 4 percent.
Sichuan Changhong Electric Co., China’s second-biggest television maker, retreated 5.4 percent, heading for biggest decline since Jan. 3. First-quarter profit fell 94 percent from a year earlier, the company said in an exchange statement.
China Resources Power Holdings Co. tumbled 9 percent in Hong Kong, the most since July 2013. Chairman of China Resources Holdings Co. Song Lin is being probed for “suspected disciplinary violations,” according to the Communist Party’s Central Commission for Discipline Inspection in a statement on its website on April 17.
China Resources will cooperate with the probe, the company said the same day. The official Xinhua News Agency reported April 19 that Song had been removed from office, citing a Communist Party official it didn’t identify.
Trading volumes in the Shanghai Composite were 8.2 percent below the 30-day average today. The index is valued at 7.6 times 12-month projected earnings, compared with the five-year average multiple of 12, according to data compiled by Bloomberg.
To contact the reporter on this story: Zhang Shidong in Shanghai at email@example.com
To contact the editors responsible for this story: Michael Patterson at firstname.lastname@example.org Allen Wan, Richard Frost