BEIJING: Chinese stocks rose, sending the benchmark index to a seven-year high, amid speculation the government will accelerate monetary stimulus to support the economy.
Aluminum Corp. of China Ltd. led gains for material companies before preliminary manufacturing data Thursday that will likely show a contraction. Jiangsu Hengrui Medicine Co. advanced 5 percent after the government said it plans to remove limits on most drug prices. Baoding Tianwei Group on Wednesday became the country’s first state-owned company to default on an onshore bond, underscoring the government’s pledge to open a cooling economy to market forces.
The Shanghai Composite Index rose 1.8 percent to 4,369.90 at the 11:30 a.m. break. The gauge has jumped 89 percent in the past six months, the most among benchmark indexes globally, as the government lowered borrowing costs to boost growth. The People’s Daily said in a commentary in its online edition that the bull market is just getting started at the 4,000 level.
“Data showing deterioration will only fuel speculation of more stimulus,” while the People’s Daily report will make investors more confident in the durability of the rally, said Jimmy Zuo, a Shenzhen-based trader at Guosen Securities Co.
