China Stocks Rise on Exports, CPI; Retailers Gain Before Holiday

China’s stocks rose, capping a second week of gains for the benchmark index, as reports showed exports beat analysts’ estimates and inflation eased. Retail and auto stocks rallied before the start of a weeklong holiday.

SAIC Motor Corp. and Great Wall Motor Co. led automakers higher after the nation’s passenger-vehicle sales exceeded estimates last month. Department-store operator Dashang Group Co. jumped 7.6 percent on speculation consumer spending will expand during the Lunar New Year holiday. Government reports showed exports jumped 25 percent last month, while the inflation rate of 2 percent matched economists’ estimates.

“The economic data show a mild recovery is still under way and that will continue to support the run-up in stock prices,” Wei Wei, an analyst at West China Securities Co. in Shanghai, said by phone. “Trading is a bit light before the holidays.”

The Shanghai Composite Index added 0.6 percent to 2,432.40 at the close for a 0.6 percent gain this week. Trading volumes were 19 percent lower than the 30-day average, according to Bloomberg data. The CSI 300 Index rose 0.4 percent to 2,771.73 and the Hang Seng China Enterprises Index slid 0.4 percent. The Bloomberg China-US 55 Index fell 1.8 percent yesterday and the iShares FTSE China 25 Index Fund sank 2.3 percent.

The Shanghai Composite has risen 24 percent from a three-year low on Dec. 3 on signs economic growth is accelerating and as regulators approved more investment quotas for foreign investors. It’s valued at 13.4 times reported profit, near the highest level since September 2011, data compiled by Bloomberg show. The 100-day volatility was 17.8, compared with 17.5 over the past year.

Trade Data

China’s exports and imports rose more than estimated in a January that had five more working days than last year, helping sustain a growth rebound in the world’s second-biggest economy.

Overseas shipments increased, the customs administration said, compared with the 17.5 percent median estimate in a Bloomberg News survey. Imports jumped 28.8 percent, exceeding the 23.5 percent median forecast of analysts.

Inflation rose 2 percent in January from a year earlier, decelerating from December’s 2.5 percent gain, the statistics bureau said. That matched the median estimate of 35 analysts in a Bloomberg survey. Producer prices fell 1.6 percent, narrowing from a 1.9 percent decline in December, the agency said.

A gauge of consumer-discretionary companies in the CSI 300 added 2.8 percent to the highest level since November 2011. SAIC, China’s largest carmaker, rose 7.4 percent to 18.46 yuan, the biggest gain since April 2011. Great Wall Motor, the biggest pickup truck maker, climbed 5.8 percent to 29.86 yuan.

Auto Sales

Passenger-vehicle sales surged 49 percent from a year earlier to a monthly record 1.73 million units in January, the state-backed China Association of Automobile Manufacturers said in an e-mail yesterday. That compares with the 1.5 million unit average of six analyst estimates compiled by Bloomberg.

Dashang Group surged 7.6 percent to 37.10 yuan. Chongqing Department Store climbed 7.2 percent to 28.14 yuan. Yinchuan Xinhua Commercial (Group) Co. added 1 percent to 16.18 yuan.

An improving economic outlook is set to give retail sales a boost during the biggest buying season of the year. The Lunar New Year is a period when consumers splurge on everything from beauty products and jewelry to lavish family dinners. China’s retail sales for January and February may rise 15.4 percent, the fastest pace in 13 months, according to nine economists surveyed by Bloomberg.

Financials Slump

Chinese financial companies, led by banks and developers, fell the most among 10 industry groups on the CSI 300 today and this week on concern the government may introduce measures to curb gains in property prices and as valuations jumped since the start of a bull-market rally two months ago.

The financial gauge slid 0.7 percent today and 2.2 percent for the week. Still, it has rallied 41 percent since of the bull-market rally on Dec. 3, the most among 10 industry groups. The sub-gauge trades at 10.2 times reported earnings, near the highest level since August 2011.

China Minsheng Banking Corp. declined 4.4 percent to 10.52 yuan, adding to yesterday’s 6 percent plunge. Gemdale Corp., which reported contracted sales of 2.48 billion yuan for last month, dropped 1.1 percent to 7.93 yuan.

Chinese B shares, created in 1992 for foreign investors, have soared to a two-year high in Shenzhen on speculation that more companies will seek to list in Hong Kong, where companies are awarded higher valuations. Their Shanghai-traded peers, which have lagged behind, may join the bonanza.

“Shanghai is cheap,” Hao Hong, Bank of Communications Co.’s Hong Kong-based China strategist, wrote in a Feb. 5 e-mail. “The stocks have moved, but not as dramatically as Shenzhen.”