China’s Stocks Advance on Stimulus Bets as Banks Rebound

China’s stocks rebounded from the biggest loss in five years amid speculation the government will provide further stimulus to the economy after data showed inflation slowed more than estimated.

The Shanghai Composite Index climbed 2.9 percent to 2,940 at the close, after plunging 5.4 percent yesterday. Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp., the nation’s two biggest lenders, rose at least 2.2 percent. Financial companies rallied, helping stocks extend gains in the afternoon, on prospects the government is injecting funds into the interbank market through China Development Bank, according to Cai Feng, a strategist at Guoyuan Securities Co.