China Stocks Gain, Cheered By Regulator's Remarks

MarketWatch Pulse

Chinese stocks gained Monday morning, with Hong Kong shares rebounding from mild losses at the end of last week, and Shanghai markets looking likely to extend a nine-session winning streak. The Hang Seng Index rose 0.4%, with the mainland-China-tracking Hang Seng China Enterprises up 0.3%. The Shanghai Composite Index advanced 0.7%, extending its climb after scoring its first finish above 3,600 in seven years on Friday. Monday's improvement for the Chinese markets came after a spokesman for the China Securities Regulatory Commission said Friday that the recent gains for Shanghai-listed shares had its own "inevitability and rationality," and was due to China's improving economic conditions. The spokesman also said officials had spoken with MSCI Inc. and FTSE International Ltd. about including Shanghai A-shares on their respective indexes. In Hong Kong, mainland Chinese property developers posted substantial gains, helped by reports that China was preparing to unveil policies to boost the housing market, including allowing first-time home buyers to pay only 20% down payment if they get their loans from public housing funds. Hang Seng Index components China Resources Land Ltd. and China Overseas Land & Investment Ltd. jumped 3% and 2.7%, respectively, while outside the index, Shimao Property Holdings Ltd. advanced 2.4%, and China Vanke Co. tacked on 1.2%. Chinese brokers also rose, with some of the companies due to release earnings this week. Citic Securities Co. climbed 2.6% ahead of its earnings due later in the day, while Haitong Securities Co. -- set to report on Friday -- also improved by 2.6%. Among other gainers in the financial sector, China Galaxy Securities Co. rose 3%, First Shanghai Investments Ltd. added 2.6%, Shenyin Wanguo HK Ltd. moved up 2.1%, and China Everbright Ltd. traded 1.2% higher.

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