By Laura He, MarketWatch
HONG KONG (MarketWatch) — Chinese stocks posted their biggest advance in nearly four months on Tuesday, after the government unveiled guidelines to reform its economic system in 2015, which includes further opening up capital markets.
The mainland China’s benchmark Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.48% rose 3.1% to 4,417.55, its highest settlement in two weeks. The index also marked its biggest daily percentage gain since late January.
The State Council, China’s cabinet, said in a guideline published on Monday that the country needs deepen the economic system reform in 2015 by further opening up the financial sector to both foreign and domestic investors, expanding capital markets, and intensifying the reform of state-owned enterprises, according to the Chinese government’s official website.
Financial shares rallied across the board, with brokers rising sharply. Huatai Securities Co. Ltd. /zigman2/quotes/208233190/delayed CN:601688 -0.72% , one of China’s largest brokerage firms soared limit-up by 10%, after it kicked off its Hong Kong initial public offering on Monday, aiming to raise up to $4.5 billion. Orient Securities Co. Ltd. /zigman2/quotes/207820122/delayed CN:600958 -0.51% and Dongxing Securities Co., Ltd. /zigman2/quotes/203344141/delayed CN:601198 -0.60% also surged 10%. Haitong Securities /zigman2/quotes/203443667/delayed CN:600837 -3.56% and Citic Securities Co. Ltd. /zigman2/quotes/210326178/delayed CN:600030 -0.55% gained 7.5% and 6.6% respectively.
Banks also recorded a solid advance, with China Merchants Bank Co., Ltd. /zigman2/quotes/209899244/delayed HK:3968 -1.98% /zigman2/quotes/210188047/delayed CN:600036 -0.70% spiking 4.6%, and Bank of China Ltd /zigman2/quotes/204682472/delayed HK:3988 0.00% /zigman2/quotes/209359942/delayed CN:601988 +0.86% , China Citic Bank Corporation Ltd. /zigman2/quotes/205809997/delayed HK:998 +1.08% /zigman2/quotes/206411273/delayed CN:601998 +4.94% , China Construction Bank Corporation /zigman2/quotes/208974133/delayed HK:939 -1.37% /zigman2/quotes/208058581/delayed CN:601939 0.00% and China Minsheng Banking Corp., Ltd. /zigman2/quotes/208095167/delayed HK:1988 -0.76% /zigman2/quotes/203910009/delayed CN:600016 +0.29% all rallying 3%.
Railway stocks jumped, after China’s top economic planning agency said Monday it gave the green light to six rail and subway projects, with a total investment of close to 250 billion yuan ($40 billion), to spur economic growth. China Communication Construction Co. Ltd. /zigman2/quotes/210502682/delayed CN:601800 -2.36% surged 10%, China Railway Construction Corporation Ltd. /zigman2/quotes/202453937/delayed CN:601186 -1.12% jumped 3.5% and China Railway Group Ltd. /zigman2/quotes/200210795/delayed CN:601390 -1.95% climbed 2.6%.
WSJ Market Wrap: May 18, 2015
U.S. stocks pushed higher Monday, erasing early losses, with both the Dow industrials and the S&P 500 on track for new all-time highs. Ann Inc. to sell itself to Ascena Retail Group for $2.2 billion in cash and stock.
In Hong Kong, the benchmark Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -2.65% also rose 0.4%, with the mainland-China-tracking Hang Seng China Enterprises /zigman2/quotes/210598031/delayed CN:160462 -2.21% popping 1.9% higher.
In other Asian markets, Japan’s Nikkei Average /zigman2/quotes/210597971/delayed JP:NIK -1.42% also advanced 0.7% to 20,026.38, back above 20,000 for the first time in three weeks. The index had risen for a third day in a row. The broader Topix /zigman2/quotes/210598092/delayed JP:180460 -1.54% added 0.4%.
Then yen /zigman2/quotes/210561789/realtime/sampled USDJPY -0.2655% weakened a little against the greenback, with the dollar buying ¥120.04, compared to ¥119.67 at the previous Tokyo stock close.
Elsewhere, Seoul’s Kospi Composite Index /zigman2/quotes/210598069/delayed KR:180721 -0.69% tacked on 0.3%, while Sydney’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.38% fell 0.8%.