China stocks rise as banks rally on steady earnings reports and gold stocks track bullion’s record high

ABC chairman Gu Shu said the overall economy was showing positive signs of recovery which was creating a good environment for steady profit growth at his bank

Chifeng Jilong Gold Mining rose by the maximum 10 per cent and peer Shandong Gold Mining rallied 7.9 per cent as the precious metal struck record highs

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People walk past a branch of Agricultural Bank of China in Shanghai, China. “The overall economy is showing positive signs of recovery … creating a good environment for the steady profit growth of the bank,” said Gu Shu, the bank’s chairman. Photo: Reuters

Published: 10:58am, 29 Mar 2024Updated: 4:25pm, 29 Mar 2024

Chinese shares rose on Friday, capping a second straight month of gains, as gold stocks surged on the back of the metal’s all-time highs and banks gained after posting steady earnings. Investors remain watchful ahead of the official PMI data due this weekend, which is expected to show manufacturing activity expanded after contracting for five consecutive months.

The Shanghai Composite Index added 1 per cent to 3041.16 on Friday, bringing the gain this month to 0.9 per cent. The CSI 300 Index of the nation’s biggest companies added 0.5 per cent. Hong Kong’s financial markets are closed for the Easter holidays and will reopen on Tuesday.

Chifeng Jilong Gold Mining rose to the daily limit of 10 per cent to 16.35 yuan and peer Shandong Gold Mining rallied 7.9 per cent to 28.23 yuan, leading gains among gold stocks, after the precious metal climbed to a fresh peak. Oil giant PetroChina jumped 6.8 per cent to 9.88 yuan while peer CNOOC advanced 3.8 per cent to 29.23 yuan per share.

State-owned Agricultural Bank of China (ABC) jumped 1.4 per cent to 4.23 yuan while China Construction Bank added 0.6 per cent to 6.87 yuan, after posting steady earnings growth for 2023.

“Sentiment is shifting” and the market has started to reward positive news on earnings, Steven Sun, head of research at HSBC Qianhai Securities said in a report on Thursday. “Market can grind higher if supported by fundamentals, especially earnings, in coming months,” he added.

The Shanghai Composite Index has benefited from Beijing’s ramp-up in policy support to stimulate economic growth which helped it post its best winning steak in over a year. The market is now expecting more quantitative easing measures after Chinese president Xi Jinping reportedly instructed the central bank to buy more treasury bonds.