Chinese Shares Head for Monthly Advance as Year of Rooster Looms

Will Asian Stocks Extend Their Rally This Year?

Chinese shares eked out gains amid the lowest turnover in two years as traders looked forward to the start of the nation’s biggest annual holiday. Commodity producers jumped on optimism that a rally in metal prices will continue.

The Shanghai Composite Index rose 0.2 percent to 3,149.55. The gauge has climbed 1.5 percent this month as the yuan strengthened and improving Chinese economic data buoyed the outlook for commodities such as copper and oil. The nation’s markets will be closed from Friday for the week-long Lunar New Year break. Hong Kong’s Hang Seng Index added 0.4 percent.

Chinese financial markets are having a better month than December, when the bonds had a record selloff, the yuan tumbled and stocks were among the world’s worst performers. Efforts to stem capital outflows appear to be working, with Chinese banks last month registering net inflows under the capital account for the first time since the yuan’s devaluation in August 2015, while U.S. President Donald Trump has also voiced concern over the strength of the greenback.

"China and Hong Kong markets are calm before holidays," said Ben Kwong, executive director at KGI Asia Ltd. in Hong Kong. "We had a better January, as concerns about yuan depreciation eased amid a weaker U.S. dollar and some commodity prices rallied. "

Indexes of energy and materials companies are the biggest gainers among Chinese stocks this year, rallying at least 5 percent. A shift toward stimulus spending early last year, along with some industrial capacity cuts, helped to send producer prices up the most in more than five years in December. Goldman Sachs Group Inc. said this week that commodities will be supported in the months ahead by a global rebound spanning the U.S., Europe and China.

  • Aluminum Corp. of China Ltd. and Jiangxi Copper Co. both rose more than 2 percent in Shanghai. Copper jumped 2.6 percent in London on Tuesday, while aluminum advanced to its highest level since May 2015.
  • Zhejiang Jinke Entertainment Culture Co. slumped by its daily limit in Shenzhen after announcing plans to buy the maker of Talking Tom games for at least $1 billion.
  • Property shares gained in Hong Kong, led by Hang Lung Properties Ltd. About 1,100 new apartments have been sold in the city this year as of Sunday, up from about 220 in the same period a year earlier, Ming Pao newspaper reported, citing its own data.
  • Television Broadcasts Ltd. surged 11 percent in Hong Kong after the company announced a plan to buy back as many as 138 million shares at HK$30.5 per share
  • Hanergy Thin Film Power Group Ltd. reached a deal with Hong Kong’s Securities and Futures Commission on the requirements for the shares to resume trading, The Standard reported, citing the company’s chairman
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