China’s Stocks Gain Most in Two Weeks; Construction Bank Rises

By Zhang Shidong

Dec. 3 (Bloomberg) -- China’s stocks rose by the most in two weeks, led by financial and raw-material companies, amid evidence the government is buying shares to support the market.

China Construction Bank Corp., the nation’s second-largest bank, rose 5.2 percent after China’s $200 billion sovereign wealth fund increased its stake in the lender. Yunnan Copper Industry Co., China’s third-biggest producer of the metal, jumped by the 10 percent daily limit after denying a newspaper report alleging its managers had benefited from deals with affiliated companies.

“You shouldn’t be pessimistic about the market now, as the government is starting to support it,” said Wang Peng, a fund manager at First Trust Fund Management Co. in Shanghai, which oversees the equivalent of $2.1 billion. “Most negative factors have been priced in.” Wang said he is buying shares and favors companies in electric equipment manufacturing and infrastructure.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China’s two exchanges, gained 84.04, or 4.5 percent, to 1,952.67 at the close, the biggest since Nov. 19. All 10 industry groups advanced and only two stocks fell on the 300- member gauge.

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