China stocks clinches enormous gains in 3 weeks, Shanghai Composite soars 0.5%

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BEIJING: China stocks extended the benchmark index’s largest surge in three weeks, while financial material companies moved ahead on speculation the government is taking more measures to encourage the market.
Industrial & Commercial Bank of China Ltd. led gains for lenders, while China Life Insurance Co. and Haitong Securities Co. both climbed more than 2 percent to send financial shares to the biggest advance among industry groups. Jiangxi Copper Co. paced increases for materials shares, adding 2.1 percent.
The Shanghai Composite Index rose 0.5 percent to 3,087.77 at 9:52 a,m. after surging 3.4 percent yesterday. The People’s Bank of China plans to temporarily waive a requirement for lenders to set aside reserves for some deposits, people with knowledge of the matter said, highlighting efforts to boost lending amid a slowdown of the world’s second-largest economy.
“Expectations of PBOC measures are likely going to continue to be in play,” Ryan Huang, a market strategist at IG Ltd. in Singapore, said by phone. “We’re probably going to see low volumes today that could prompt some swings.”
The Shanghai index has risen 45 percent this year on speculation the central bank will further ease monetary policy to support the economy after cutting interest rates. The gauge is valued at 11.6 times 12-month projected earnings, near the highest level in three years, according to data compiled by Bloomberg.
The CSI 300 Index advanced 0.8 percent today. Hong Kong’s stock market was closed yesterday and will remain closed for the Christmas holidays.
The Shanghai gauge’s 50-day volatility reached a four-year high today, with trading volumes 1.1 percent below the 30-day average for this time of day.