BEIJING: Chinese stocks headed for their biggest two-day gain in three weeks, led by energy and power companies, as funds flowed back to the equities market after a flood of new share offerings last week.
Huadian Power International Corp. and Huaneng Power International Inc. jumped more than 9 percent, propelling a gauge of utilities to the biggest advance among industry groups. PetroChina Co. rallied 2.8 percent after Caixin cited its president as saying the company’s first-half profit was better than expected. China Petroleum & Chemical Corp. surged 4 percent after Macquarie Group upgraded the stock to outperform.
The Shanghai Composite Index climbed 2.4 percent to 4,684.79 at 2:49 p.m, extending Tuesday’s 2.2 percent jump. The gauge plunged 13 percent last week, the worst weekly loss since the 2008 global financial crisis. Funds started returning to the stock market after an estimated 6.7 trillion yuan ($1.08 trillion) of liquidity was locked up due to initial public offerings last week.
“The expectation was for the market to rebound as there is a substantial amount of money locked up that it is going to be released today,” said Gerry Alfonso, a director at Shenwan Hongyuan Group Co. in Shanghai.
