China's stocks rose the most in a week, led by consumer and technology companies, after the government called for deepening economic reform including measures to boost domestic consumption.
Retailer Shanghai Metersbonwe Fashion and Accessories Co. jumped 10 percent, driving a rally for consumer companies reliant on economic growth, after Shenyin & Wanguo Securities recommended buying the stock on the outlook for earnings next year. Shanghai Baosight Software Co. led gains for technology shares after signing a contract to provide data center services to Alibaba Group Holding Ltd. Jiangxi Copper Co. and Yunnan Copper Industry Co. slid at least 1 percent as rising copper stockpiles indicated slowing demand.
The Shanghai Composite Index (SHCOMP) climbed 0.5 percent to 2,203.92 as of 11:11 a.m. local time. The CSI 300 Index added 0.5 percent to 2,439.24. The Hang Seng China Enterprises Index (HSCEI) added 0.6 percent. The Shanghai Composite has risen 13 percent from its four-year low on June 27 and trades at 8.7 times projected earnings for the next 12 months, compared with the seven-year average of 15.4, according to data compiled by Bloomberg.
The government will boost financial support to small businesses, stabilize foreign trade growth, cut overcapacity and look for new engines to drive consumption, the State Council said in a statement late yesterday after an Oct. 18 meeting led by Premier Li Keqiang, reiterating existing policies.
"When downward pressures on the economy are relatively big, we should harden our confidence; when the economy stabilizes and trends for the better, we should keep a sober mind," the State Council said in the statement.
The Shanghai gauge fell 1.5 percent last week as companies linked the Shanghai free-trade zone tumbled on concern gains were excessive, overshadowing a government report showing economic growth accelerated in the third quarter.
--Zhang Shidong. Editors: Allen Wan, Chan Tien Hin
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