BEIJING: China stocks headed for their first monthly gain since May as government attempts to stabilize equities bore fruit. Baby-related companies climbed after the ending of the one-child policy, while PetroChina Co. led losses by commodity producers after posting its worst-ever earnings.
The Shanghai Composite Index rose 0.1 percent to 3,391.41 at the trading break, reversing a 1.2 percent loss. The gauge has gained 11 percent this month. Shares of companies from infant formula makers to toy producers jumped after the government said it will allow all couples to have two children. PetroChina, China’s biggest oil and gas producer, dropped 2.9 percent in Hong Kong. Bank of China Ltd. lost 1 percent after net income fell for the first time since the global financial crisis.
The Shanghai index has rebounded 16 percent from this year’s low on Aug. 26 as the government took measures to stabilize the stock market and policy makers introduced stimulus to boost economic growth. China’s decision to end birth restrictions may boost retail sales by as much as 240 billion yuan ($38 billion) a year starting in 2017, according to Credit Suisse Group AG.
“The two-child policy is something that’s newly confirmed from the plenum and the market hadn’t fully expected that,” said Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, who’s adding to his holdings. “The market has been rising this month because of the loosening monetary policy from the central bank.”
The CSI 300 Index added 0.2 percent, led by consumer staples and technology companies. Hong Kong’s Hang Seng China Enterprises Index fell 0.3 percent. The Hang Seng Index lost 0.5 percent. Trading volumes in the Shanghai gauge were 18 percent lower than the 30-day average for this time of day on Friday.
