Stocks rise for third day amid suspected state-fund buying

Chinese stocks eked out a gain in late trading amid speculation state-­backed funds intervened to support the market during annual policy meetings.
The Shanghai Composite Index rose 0.2 percent at the close, erasing a loss of as much as 1.4 percent, amid turnover that was 18 percent lower than the average. PetroChina Co., long considered a target of government buying because of its large index weighting, climbed for a second day. China Life Insurance Co., the fifth-most heavily weighted stock, jumped to a two-month high. China’s central bank has drafted rules for a levy on foreign-exchange trading that would help curb currency speculation, according to people with knowledge of the matter.
China is stepping up intervention in its financial markets after stocks extended last year’s USD5 trillion selloff and the yuan fell to a five-year low in February. The Shanghai Composite has risen 6.6 percent this month amid suspected buying by state-backed funds in some of the nation’s biggest companies as policy makers gather in Beijing for the National People’s Congress that closes today.
“As expected, the market staged a rebound toward the close as state institutions emerged to buy,” said Castor Pang, head of research at Core-Pacific Yamaichi Hong Kong. “The market is also waiting for some policy signals from the NPC today [Tuesday].”
The Shanghai gauge climbed to 2,864.37 at the close, capping a third day of advances. Gauges of consumer-staple and utility companies rose at least 1.4 percent on the CSI 300 Index, which advanced 0.3 percent. The Hang Seng China Enterprises Index declined 0.9 percent in Hong Kong, while the benchmark Hang Seng Index lost 0.7 percent.
The yuan traded in Hong Kong fell 0.18 percent to 6.5058 a dollar, heading for its biggest two-day retreat in four weeks.
Thee Shanghai Composite has lost 19 percent this year at yesterday’s close, still the most among 93 global peers tracked by Bloomberg. Bloomberg