China Stocks Advance as Dongfang Electric, China Railway Climb

By Zhang Shidong

Nov. 13 (Bloomberg) -- China's stocks rose to the highest in three weeks, led by industrial companies, as the government took steps to implement its 4 trillion yuan ($586 billion) economic stimulus plan.

Dongfang Electric Corp., China's second-biggest maker of power equipment, jumped by the 10 percent limit after the government approved construction of 10 nuclear power plants. China Railway Group Ltd. and China Railway Erju Co. also surged by the maximum as China Construction Bank Corp. pledged more lending for railway and other projects. Baoshan Iron & Steel Co. added 4.8 percent after the government scrapped export tariffs on some steel products.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, rose 72.26, or 4 percent, to 1,874.08 at the close, the highest since Oct. 21. Just two stocks on the 300-member index fell. The gauge is down 65 percent this year.

``The market is showing an initial sign of reaching the bottom,'' said Fan Dizhao, an investment manager at Guotai Asset Management Co. in Shanghai, which oversees the equivalent of $5.1 billion. ``Sentiment has been improving as investors are coming back to buy infrastructure-related stocks on the government's stimulus plan.''

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net