Sept. 14 （Bloomberg） -- China’s stock-index futures rose, signaling the benchmark index may gain, after Premier Wen Jiabao said the nation’s economy is in “good shape” and a forecast for faster European economic growth boosted confidence in the global recovery.
Futures on the CSI 300 Index expiring in September, the most active contract, gained 0.1 percent to 2,972 as of 9:16 a.m. local time. Jiangxi Copper Co. may climb among raw-material producers on higher metal prices. China Railway Construction Corp. may rise after winning new contracts. China Vanke Co. and Poly Real Estate Group Co. may pace losses by developers after Wen said the government will curb property market speculation.
“Stocks may extend gains on expectations about economic growth,” said Wei Wei, an analyst at West China Securities Co. in Shanghai.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, gained 25.11, or 0.9 percent, to 2,688.32 yesterday. The CSI 300 Index rose 1 percent to 2,962.32.
The Shanghai index has rebounded 14 percent from this year’s low on July 5 on signs the nation’s economic slowdown is stabilizing. The index plunged 27 percent in the first half as the government imposed tightening measures ranging from restrictions on house purchases to a 7.5 trillion yuan （$1.1 trillion） annual limit on new lending by banks.
“China’s economy is now in good shape, featuring fast growth, gradual structural improvement, rising employment and basic price stability,” Wen said yesterday at the World Economic Forum’s Summer Davos meeting in China’s port city of Tianjin.
Economic Data
Industrial production rose 13.9 percent in August from a year before, the most in three months, and retail sales and lending figures exceeded economists’ estimates, statistics bureau and central bank data released Sept. 11 in Beijing showed. Imports also accelerated, another sign Chinese growth is picking up after a second-quarter moderation that came as the country took measures to cool the property market.
The European Commission said Europe’s economy may grow almost twice as fast as previously forecast this year with a more “moderate” expansion in the second half. Gross domestic product in the 16-nation euro region will likely increase 1.7 percent this year instead of the 0.9 percent projected at the depth of Europe’s fiscal crisis in May, the Brussels-based commission said in a report published yesterday.
The European Union is China’s biggest export market, comprising about 20 percent of overseas shipments.
Buffett Comments
Warren Buffett ruled out a second recession in the U.S. and said businesses owned by his Berkshire Hathaway Inc. are growing.
“I am a huge bull on this country,” Buffett, Berkshire’s chief executive officer, said today in remarks to the Montana Economic Development Summit. “We will not have a double-dip recession at all. I see our businesses coming back almost across the board.”
Crude oil for October delivery climbed 1 percent to $77.19 a barrel yesterday in New York, the highest settlement price since Aug. 11. The London Metal Exchange Index of six metals including aluminum and copper jumped 1.8 percent yesterday, the first gain in three days.
China Railway said it won 29.1 billion yuan worth of contracts for work on domestic rail lines, equivalent to 8.2 percent of revenue in 2009.
China’s equities are in for a “rough ride,” according to Diana Choyleva, economist at Lombard Street Research.
“In sequential terms, both industrial production and investment have weakened,” she wrote in a note to clients. “It is less clear whether this is just an inventory rebalancing. But if the nascent downswing does not take hold, the authorities will reinforce it by tightening policy more decisively unless they are prepared to tolerate continued overheating.”
China will curb property market speculation and maintain stable housing prices, Wen said. The nation will increase the supply of affordable housing, he said.
--Zhang Shidong. Editors: Richard Frost, Allen Wan
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