China’s Stocks Rise for Fourth Day as Phone Companies Surge

China’s stocks rose for a fourth day as phone companies rallied on speculation of a merger and consumer shares extended gains on prospects for increased sales during the Chinese new year holiday.

China United Network Communications Ltd., which controls China Unicom (Hong Kong) Ltd., jumped 8.4 percent in Shanghai. China Unicom and China Telecom Corp. climbed more than 2 percent in Hong Kong as traders speculated the two companies may combine. China Telecom said in a statement that it isn’t aware of any plan to merge with China Unicom. Beingmate Baby & Child Food Co. jumped 5.5 percent on Fonterra Cooperative Group Ltd.’s plan to buy a stake. Citic Securities Co. paced a retreat for financial shares with a slide of 1.1 percent.

The Shanghai Composite Index gained 0.5 percent to 3,173.42 at the close, with trading volumes 40 percent below the 30-day average. China’s markets will be shut for a week-long holiday from Feb. 18.

The CSI 300 Index added 0.3 percent. Hong Kong’s Hang Seng China Enterprises Index climbed 1.1 percent, while the Hang Seng Index gained 0.4 percent.

The Shanghai Composite has gained 50 percent over the past year, the second-best performer among 93 global benchmarks tracked by Bloomberg, spurred by monetary easing speculation, an exchange link with Hong Kong and growth in margin trading. The gauge is valued at 12 times 12-month projected earnings, compared with the five-year average of 10.3, according to data compiled by Bloomberg.

Source: Bloomberg


China’s Stock-Index Futures Fall Before Inflation Data

China’s stock-index futures fell before the release of inflation data.

Futures on the CSI 300 Index expiring in February, the most active contract, slipped 0.1 percent to 3,359.80 as of 9:27 a.m. local time. Consumer prices probably rose 1 percent in January from a year earlier, slowing from a 1.5 percent gain a month earlier, according to the median estimate of a Bloomberg survey. Declines in producer prices accelerated to 3.8 percent from 3.3 percent in December, the survey showed. The report is scheduled to be released at 9:30 a.m.

The data will add to concern demand is weakening and that further monetary easing is needed to sustain growth in the world’s second-biggest economy. Data for January showed imports falling by the most in more than five years, manufacturing gauges signaling a contraction and services expanding at the weakest pace in six months.

The Shanghai Composite Index climbed 0.6 percent to 3,095.12 yesterday as consumer companies rallied before the start of Chinese new year holidays this month. Hong Kong’s Hang Seng China Enterprises Index fell 0.4 percent to 11,672.42. The CSI 300 Index rose 1 percent. The Hang Seng Index lost 0.6 percent.The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, slipped 0.1 percent.

The Shanghai Composite is down 8.5 percent from a five-year high set on Jan. 26 after the regulators tightened rules on margin trading to cool the market. Still, the measure has jumped 51 percent over the past year, the second-best performer among 93 global benchmarks tracked by Bloomberg.

Source : Bloomberg