China stocks 7yrs higher at noon, Shanghai climbs 1.1pc

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BEIJING: China’s stocks rose to a seven-year high on expectations monetary stimulus will bolster the economy after the central bank cut the amount of cash lenders must set aside as reserves by the most since the global financial crisis. Industrial companies surged the most in Shanghai, with China Railway Group Ltd. and China Shipbuilding Industry Co. jumping by more than 9 percent. Poly Real Estate Group Co. led a rally for property developers, while Agricultural Bank of China Ltd. advanced 2.1 percent in Hong Kong after the People’s Bank of China said reserve-requirement ratios will be cut 1 percentage point from Monday. The Shanghai Composite Index rose 1.1 percent to 4,333.99 at 1:13 p.m., after swinging between gains and losses six times as investors weighed the reserve-ratio cut against new restrictions on using leverage for share trading. The China Securities Regulatory Commission announced measures on Friday to clamp down on the use of shadow financing for equity purchases and increase the supply of shares available for short sellers. “Many mainland investors expect the market to extend gains, led by reserve ratio-sensitive sectors such as banks and property,” said Yen Chiu, a Hong Kong based trader at Shenwan Hongyuan Group Co. “The market will close in the green. Trading will be volatile though as some people are being cautious after the regulator’s move.”