China’s Stocks Rise, Capping Weekly Advance; Sinopec Climbs

China’s stocks rose, driving the benchmark index to its biggest five-day gain in seven weeks. China Petroleum & Chemical Corp. led an advance for energy companies before the release of earnings later today.

China Petroleum, also known as Sinopec, jumped 2.7 percent and was the biggest contributor to today’s gain in the Shanghai Composite Index. China United Network Communications Ltd. rose to a two-week high on higher profit. At least 98 Chinese companies listed in Shanghai and Hong Kong will report earnings today, according to data compiled by Bloomberg.

The Shanghai Composite added 0.2 percent to 2,328.28 at the close. The measure jumped 2.2 percent this week, bolstered by economic optimism. A report yesterday by HSBC Holdings Plc showed manufacturing is likely to expand at a faster pace this month. China’s growth will accelerate in 2013, the Organization for Economic Cooperation and Development said today.

“There was an improvement in the economy in the fourth quarter so investors are optimistic company earnings will be good,” Zhang Haidong, an analyst at Tebon Securities Co., said by telephone from Shanghai today. Factors like yesterday’s HSBC PMI data and earnings prospects “will support the market.”

The Shanghai gauge, which changed directions at least 10 times today, saw 30-day volatility jump this week to the highest level since February 2012, according to data compiled by Bloomberg. The CSI 300 Index rose 0.1 percent to 2,618.31 today. The Hang Seng China Enterprises Index slid 0.4 percent in Hong Kong. The Bloomberg China-US 55 Index lost 1.1 percent in New York yesterday.

Earnings Outlook

The Shanghai Composite is valued at 9.5 times projected 12-month earnings, compared with the seven-year average of 15.8, according to data compiled by Bloomberg. Trading volumes were 14 percent lower than the 30-day average today, according to data compiled by Bloomberg.

Sinopec, Asia’s biggest oil refiner, gained 2.7 percent to 7.72 yuan. The stock contributed to almost half of the gain in the Shanghai Composite today. The company may report 2012 net income of 59.6 billion yuan ($9.59 billion), according to the median estimate of five analysts surveyed by Bloomberg. That compared with a profit of 73.2 billion yuan in 2011.

China United, which controls the nation’s second-largest cell phone operator, added 1.2 percent to 3.48 yuan, its highest close since March 8. Net income rose 68 percent last year, the company said in a statement yesterday.

Growth Forecast

China’s economic expansion may reach 8.5 percent this year and 8.9 percent in 2014 as the nation benefits from increased demand for housing and a pickup in business investment, the Paris-based OECD said in a report released in Beijing today.

Economic growth eased to 7.8 percent last year, the slowest pace in 13 years, according to the statistics bureau.

A gauge of financial companies including banks and brokerages in the CSI 300 rose 4.8 percent this week, the most among 10 industry groups. That was followed by a measure of consumer discretionary companies, which jumped 4.1 percent. China Citic Bank Corp. led gains for banks this week, surging 17 percent, after the 21st Century Business Herald reported regulators may ease enforcement of loan rules at smaller lenders.

The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., retreated 1.1 percent to $36.84 in New York yesterday, after jumping the most in two months the previous day.

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