Trina Rises in Solar Rally as Spreadtrum Jumps: China Overnight

Chinese stocks rebounded in New York as Trina Solar Ltd. climbed after Goldman Sachs Group Inc. upgraded U.S. solar companies, while Spreadtrum Communications Inc. surged on an improved industry outlook.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. advanced 0.6 percent to 92.10 yesterday. Trina, China’s third-largest panel manufacturer, rebounded from an 11 percent plunge while mobile-chip maker Spreadtrum jumped the most in two months. Aluminum Corp. of China Ltd., known as Chalco, climbed the most in three weeks as prices of the metal surged. Semiconductor Manufacturing International Corp. retreated after its stock was downgraded.

The Bloomberg Industries Large Solar Index, which tracks 17 solar energy companies, has jumped 38 percent this month and been up 77 percent for the year. Goldman analysts said in a note yesterday solar companies’ earnings backdrop is stabilizing, and raised the stock ratings for American companies including First Solar Inc. A better-than-estimated sales forecast by Avago Technologies Ltd., a Singapore-based chipmaker, boosted shares of peers including Shanghai-based Spreadtrum.

“The underlying reason for this round of solar rally is that we’ve started to enter a phase of consolidation,” Joshua Giordano, a managing director at Energistics LLC. in New York, which advises investors trading in energy companies, said by phone yesterday. “Once we started to sort out who the winners and losers will be, the market became comfortable enough to start reinflating.”

ETF Advances

The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., gained 0.4 percent in New York to $36.74, rising for a second time in three days. The Standard and Poor’s 500 Index added 0.4 percent to 1,654.41 as weaker-than-estimated data on economic growth and jobless claims boosted speculation the Federal Reserve will maintain stimulus.

Trina, based in Changzhou in China’s Jiangsu province, climbed 2.3 percent to $6.18 after surging as much as 6 percent earlier. Goldman sees “solid” growth and earnings visibility in the solar sector into 2014, analysts led by Brian Lee said in the report yesterday. They raised their recommendation on Tempe, Arizona-based First Solar, the largest U.S. manufacturer by shipments, to buy from neutral, and that for SunPower Corp., the second-largest, to neutral from sell.

Earlier this week, Deutsche Bank AG said the outlook of the renewable energy industry is improving due to “strong” demand from Japan, the U.S., China and other emerging markets while supply cuts have accelerated.

Spreadtrum Surges

Spreadtrum, a Shanghai-based chip designer for mobile devices, gained 7.3 percent to $19.88 in New York, jumping the most since March 20. Trading volume on the stock was more than twice the daily average over the past three months, data compiled by Bloomberg showed.

Avago reported on May 29 higher-than-estimated earnings and revenue for its second quarter ended May 5. The company forecast third-quarter revenue will grow as much as 9 percent from the prior three months, exceeding what analysts had projected.

Web games operator Shanda Games Ltd. rallied 4.4 percent to $3.77, the highest price since November.

Chalco’s American depositary receipts jumped 3.2 percent to $10.09, the biggest advance since May 10.

Three-month aluminum contracts surged 2.4 percent on the London Metal Exchange to $1,907 a metric ton yesterday, climbing the most since May 3.

Semiconductor, a circuit foundry based in Shanghai, sank

4.7 percent to a one-week low of $4.25 in New York.

Sanford Bernstein analyst Mark Li cut his recommendation on the stock to underperform, an equivalent to sell, from market perform yesterday.

The Shanghai Composite Index of domestic Chinese shares retreated 0.3 percent from two-month high to 2,324.02, while the Hang Seng China Enterprises Index in Hong Kong sank 1.6 percent to 10,751.29, sliding the most in a week.