Chinese stocks rallied, spurring a rebound for the benchmark gauge in Hong Kong from a six-year low, as energy producers surged on higher oil prices and after the government signaled it will curb overcapacity in industries such as coal that have been dragging down economic growth.
The Hang Seng China Enterprises Index jumped 3.4 percent at the close, the biggest gain since October. PetroChina Co. and China Shenhua Energy Co., the largest Chinese oil and coal producers, climbed more than 7 percent. Premier Li Keqiang called for supply-side reforms in the steel and coal industries, while the Economic Information Daily reported the government will provide 100 billion yuan ($ 15 billion) a year to help reduce capacity in those sectors. The Shanghai Composite Index rose 1.3 percent, halting a three-week losing streak.
Chinese stocks are joining a global rebound for equities after the European Central Bank signaled it may boost stimulus and crude oil nudged $ 30 a barrel. There’s speculation the Chinese government will continue to prop up mainland equities after Vice President Li Yuanchao’s comments, according to IG Asia Pte. China is willing to keep intervening in the stock market to make sure a few speculators don’t benefit at the expense of regular investors, Li said in an interview at the World Economic Forum in Davos, Switzerland.