China's Stocks Gain on Wen's Economy Pledge, U.S. Data

China’s stocks rose for the third time in four days after Premier Wen Jiabao pledged to maintain steady economic growth and U.S. housing data bolstered the outlook for exports to the world’s biggest economy.

China Vanke Co. (000002) and Poly Real Estate Co. led gains for real estate companies after the China Securities Journal reported investment funds bought more shares of developers in the first quarter. Jiangxi Copper Co., the biggest producer of the metal, gained 1.8 percent on speculation an improving global economy will spur demand. Xinjiang Goldwind Science & Technology Co., the second-biggest maker of wind turbines, advanced 2.4 percent after profit beat the company’s projection.

The Shanghai Composite Index (SHCOMP) rose 18 points, or 0.8 percent, to 2,406.81 at the close. The CSI 300 Index (SHSZ300) added 0.8 percent to 2,625.99. The Bloomberg China-US 55 Index (CH55BN), the measure of the most-traded U.S.-listed Chinese companies, retreated 0.4 percent in New York on April 24.

Thirty-day volatility in the Shanghai Composite was at 18.7 today, near the lowest in a week. About 13.4 billion shares changed hands in the Shanghai Stock Exchange on April 24, or 51 percent higher than the daily average this year.

Maintain Growth

The Shanghai index has climbed 9.4 percent this year amid speculation the government will take measures to boost the economy. Stocks in the Shanghai gauge are valued at 10.2 times estimated earnings, compared with a record low of 8.9 times on Jan. 6, according to weekly data compiled by Bloomberg.

Premier Wen said the country will maintain steady growth even amid signs the world’s second-largest economy is slowing. The government in March lowered its annual economic growth target to 7.5 percent from an 8 percent goal in place since 2005.

“China has confidence that it will sustain steady and robust economic growth,” Wen said on April 24 at a press conference in Stockholm with Swedish Prime Minister Fredrik Reinfeldt, according to an English translation of his remarks. “China will remain committed to reform and opening up.”

The growth rate of industrial production will be slightly higher in the second quarter than in the previous three months, Zhu Hongren, a spokesman for the Ministry of Industry and Information Technology, said at a briefing in Beijing on April 25. Industrial output rose 11.6 percent in the first quarter.

Mutual Fund Holdings

Jiangxi Copper rose 1.8 percent to 25.59 yuan. Tongling Nonferrous Metals Group Co. jumped 3 percent to 20.95 yuan.

The MSCI Asia Pacific Index (MXAP) rose 0.2 percent today amid better-than-estimated earnings at companies from AT&T Inc. to 3M Co. and as data indicated the U.S. housing market is stabilizing. The U.S. is China’s second-largest export market, making up about 17 percent of the nation’s overseas shipments, according to Shenyin & Wanguo Securities Co.

Chinese mutual funds increased their average stock holdings by 0.52 percentage point to 78.8 percent in the first quarter from the end of 2011, the China Securities Journal reported today, citing TX Investment Consulting Co.

Mutual funds bought more shares of real estate developers, banks and insurers in the first quarter, while selling shares of information technology companies and drugmakers, according to the report.

A gauge of developers in the Shanghai Composite jumped 3.4 percent, the most among the five industry groups. Vanke, the biggest developer, climbed 2.9 percent to 8.88 yuan. Poly Real Estate advanced 2.5 percent to 12.31 yuan.

Xinjiang Goldwind climbed 2.4 percent to 7.66 yuan. First- quarter profit fell 97 percent from a year earlier, the company said in a statement yesterday. That compared with an April 13 projection that profit may have been wiped out.

Earnings Outlook

Eight hundred and thirty-two companies in the Shanghai Composite have released annual earnings. They posted profit growth of 14 percent on average, trailing analyst estimates by 2.2 percent, according to data compiled by Bloomberg. That compared with an increase of 38 percent in the previous year.

Chinese Internet stocks slumped in the U.S. on speculation declining profit for Facebook Inc. and Apple Inc.’s drop to a six-week low signal that the information technology sector is faltering. Baidu Inc. (BIDU), the nation’s biggest online search engine, slid to the lowest since March 7 after forecasting second-quarter sales growth below analysts’ estimates.

The IShares FTSE China 25 Index Fund (FXI), the biggest Chinese exchange-traded fund in the U.S. rose for the fifth time in six days, climbing 0.5 percent to $37.19 yesterday.