China’s Stocks Rise to Three-Month High as Exports Rebound

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Can We Trust China's Economic Data?
  • Data signal `honeymoon period' for recovery, fund manager says
  • All 10 industry groups climb, led by commodity producers

China’s stocks rose to a three-month high, led by materials and energy companies, after the nation’s exports rebounded more than expected.

The Shanghai Composite Index advanced 1.4 percent at the close, with more than seven stocks climbing for each one that fell. Overseas shipments in March increased 11.5 percent from a year earlier in dollar terms, compared with a 25 percent slump in February. The MSCI Hong Kong Index erased its losses for 2016. Yanzhou Coal Mining Co. led gains by producers of the fuel after China International Capital Corp. said prices of some coal products will increase on strained supply.

The exports data add to signs of an economic rebound, with official figures due on Friday expected to show gross domestic product expanded 6.7 percent in the first quarter. The Shanghai equity gauge has risen 15 percent from a January low on expectations the world’s second-largest economy has stabilized, with the measure’s 30-day volatility dropping to a one-year low.

“We are in the honeymoon period for economic recovery and in the short term, the economy will for sure rebound as we’ve seen some improving data, including today’s trade numbers,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai, who is adding stock positions to about 30 percent of total asset allocations.

The Shanghai benchmark rose to 3,066.64, its highest close since Jan. 8. The CSI 300 Index added 1.3 percent, with gauges of material and energy companies advancing at least 2.4 percent among its 10 industry groups.

Guizhou Panjiang Refined Coal Co. and Shanxi Meijin Energy Co. surged by the 10 percent daily limit. Shanxi Xishan Coal & Electricity Power Co. jumped 5.6 percent. Prices of coking coal are expected to increase amid improving demand from the steel sector, China International Capital Corp. analysts wrote in a report Wednesday.

Hong Kong Rally

Hong Kong’s Hang Seng China Enterprises Index rallied 4 percent, its biggest gain in two months. The Hang Seng Index advanced 3.2 percent, capping a sixth day of increases, its longest streak in a year. HSBC Holdings Plc, the second-highest weighted stock in the benchmark gauge, gained the most in more than four years. The MSCI Hong Kong Index climbed 1.9 percent.

The Hang Seng China AH Premium Index fell 2.3 percent to its lowest level in five months as dual-listed companies climbed more in Hong Kong than in the mainland. Trading volumes in Hong Kong and Shanghai were at least 41 percent above their 30-day averages.

Seasonal factors aided the recovery in March overseas shipments. The week-long Chinese new year holidays fell in February this year, closing factories and curbing shipments. That saw exports tumble last month in U.S. dollar terms from a year earlier, the biggest decline since May 2009.

— With assistance by Shidong Zhang

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