BEIJING: China’s stocks rose, sending the benchmark index toward a second week of gains, as the prospect of more monetary stimulus overshadowed concern a flood of new share sales will divert funds from existing equities.
A measure of real-estate shares in Shanghai headed for a record, while China Vanke Co. climbed 0.9 percent in Shenzhen. Shanghai Waigaoqiao Free Trade Zone Development Co. rallied 10 percent after the Shanghai Securities News reported that the city will restructure more than 10 state-owned enterprises. Bright Dairy & Food Co. led gains for consumer-staples producers as it jumped more than eight percent for a fourth day.
The Shanghai Composite Index added 0.4 percent to 5,144.04 at the 11:30 a.m. break, taking this week’s advance to 2.4 percent. Data this week showed parts of the economy stabilizing as factory output and credit growth accelerated in May, while exports and producer prices slid. The People’s Bank of China may cut banks’ reserve-requirement ratios as early as this weekend, according to China Merchants Bank Co.
“May’s macro data was generally better than April but wasn’t strong enough to confirm a firmer recovery,” said Clement Cheng, a Hong Kong-based trader at RBC Investment Management. “That’s how the market is expecting further monetary loosening to come.”
