China's Stocks Rise on Trade Data, Easing Inflation; SAIC Gains

China’s stocks rose for the first time in four days as the nation’s trade expanded more than economists estimated and easing inflation provided leeway to policymakers to ease monetary policy.

China Cosco Holdings Co. (601919) climbed 3 percent on prospects increasing imports and exports will boost demand for marine transport. SAIC Motor Corp. (600104) paced an advance for automakers after passenger-car sales beat analyst expectations. While May trade and inflation data exceeded forecasts, industrial production and retail sales trailed estimates. Liquor maker Kweichow Moutai Co. led a gauge of consumer staples stocks to the biggest drop among industry groups.

The Shanghai Composite Index (SHCOMP) rose 19.79 points, or 0.9 percent, to 2,301.24 as of 1:20 p.m. local time. The CSI 300 Index (SHSZ300) advanced 1.2 percent to 2,552.89. 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 June 8.

The Shanghai measure slid 3.9 percent last week, the most since the five days ended Dec. 16, as concerns about a deepening slowdown overshadowed the first cut in lending and deposit rates since 2008. Thirty-day volatility on the gauge was at 15.65, compared with this year’s average of 18.65. About 6.8 billion shares changed hands on the index on June 8, 24 percent lower than the daily average this year.

Exports Jump

China Cosco, the world’s largest operator of dry-bulk ships, gained 3 percent to 4.83 yuan. China Shipping Container Lines Co. (601866), the country’s second-largest carrier of sea-cargo boxes, rose 1.9 percent to 2.76 yuan.

Exports climbed 15.3 percent in May to a record, the Beijing-based customs bureau said yesterday, exceeding all 29 forecasts in a Bloomberg News survey. Imports rose 12.7 percent compared with estimates for a 5.5 percent gain.

China’s “surprising” trade data doesn’t change prospects for more policy easing given signs of easing consumer-price inflation, according to Goldman Sachs Group Inc.

“The fact that CPI came down faster than expected allows for more policy flexibility,” Helen Zhu, chief China equity strategist at Goldman Sachs, said in a Bloomberg television interview in Hong Kong. “The trade data is a little bit surprising indeed but we don’t think that will seriously sway the policy makers’ intentions.”

Consumer Stocks

Inflation slowed to 3 percent, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent, lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, less than the estimate for a 14.2 percent gain.

A measure of consumer staples stocks on the CSI 300 slid 0.3 percent today, the most among the 10 industry groups. Kweichow Moutai, China’s biggest producer of baijiu liquor by market value, lost 1.2 percent to 236.10 yuan. Wuliangye Yibin Co. (000858), the second largest, fell 1 percent to 32.22 yuan.

The Shanghai Composite has advanced 4.6 percent this year. Stocks in the measure are valued at 9.95 times estimated earnings, compared with the five-year average of 17.9, according to weekly data compiled by Bloomberg.

The Shanghai index is poised to gain a further 10 percent from current levels, spurred by government measures to boost the economy including easier monetary policies and increasing infrastructure spending, Gao Ting, chief China strategist at UBS Wealth Management, said in an interview in Shanghai today.

Spain Bailout

The MSCI Asia Pacific Index (MXAP) advanced 1.8 percent today after Spain asked for a bailout of as much as 100 billion euros ($126 billion) to help shore up its banks, fanning expectations European leaders will step up effort to counter the debt crisis.

“Spain is a very important and big member of the euro zone and policy makers won’t abandon Spain,” Kingsun’s Dai said.

SAIC, China’s largest carmaker, rose 1.6 percent to 14.83 yuan. Great Wall Motor Co. (601633), China’s biggest pickup truck maker, advanced 2.9 percent to 17.05 yuan. FAW Car Co., which makes passenger cars in China with Volkswagen AG, added 2.6 percent to 12.20 yuan.

Deliveries, including multipurpose and sport-utility vehicles, rose by 22.6 percent to 1.28 million units last month, Chen Shihua, statistics department head at the China Association of Automobile Manufacturers, said over the weekend at a briefing in Beijing. That beat the 1.2 million average of seven analyst estimates compiled by Bloomberg.

Chinese stocks traded in New York rose for the first time in six weeks. The Bloomberg China-US Equity Index of the most- traded Chinese companies in the U.S. advanced 3.5 percent last week, snapping a five-week slump that sent the gauge to an eight-month low on June 4.

The iShares FTSE China 25 Index Fund (FXI), the biggest U.S.- listed China exchange-traded fund, retreated 2.8 percent to $32.81 on June 8, trimming its gain last week to 0.4 percent.