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Stocks hit 9-month high on rebound hopes

(China Daily/Agencies)
Updated: 2009-05-06 08:11

China's stocks rose for a fourth day, driving the benchmark index to the highest in nine months, after metals prices gained and Poly Real Estate Group Co said its home sales surged.

Zhongjin Gold Corp, China's second-largest gold producer, advanced 3.1 percent after bullion prices climbed for the first time in three sessions. Poly Real Estate, the country's second-biggest developer by market value, added 1.5 percent after saying sales more than tripled in the first four months.

Related readings:  Institutional investors become major stock market force  Hong Kong stocks up 0.3% on Tuesday  Chinese shares rise slightly on Tuesday  Stocks surge; S&P 500 turns positive for 2009

"The worst for the economy may be over and lots of data show the economy is recovering," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co. "That supports equities."

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 7.43, or 0.3 percent, to 2,567.34 at the close, the highest since Aug 8. The measure jumped 3.3 percent on Monday as a manufacturing index expanded for the first time in nine months.

The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, gained 0.5 percent to 2,727.01.

Xinjiang Goldwind Science & Technology Co, the biggest maker of wind turbines, climbed 5 percent after the government said a stimulus plan will double industry targets for alternative energy set in 2007.

The Shanghai Composite has jumped 41 percent this year, the second-best performer among 90 global gauges tracked by Bloomberg. The measure has advanced on optimism a 4-trillion-yuan stimulus package and new loans will prevent a slump in the economy.

The government's stimulus packages to boost local demand are "paying off," Finance Minister Xie Xuren said on Monday in a speech in Bali, Indonesia. The government will "continue to take timely measures" to tackle challenges including a sharp decline in exports and overcapacity in some industries, he said.

"Figures about home sales and commodity prices have reinforced investors' belief that the economic recovery is on the way," said Sun Chao, an analyst at Citic Securities Co in Shanghai.

Hang Seng firm

Hong Kong shares finished 0.3 percent firmer in a fourth session of gains yesterday as investors continued to buy into hopes for a global economic recovery.

The benchmark Hang Seng Index closed up 49.03 points higher at a six-and-a-half-month closing high of 16,430.08.