Chinese stocks rallied in New York, stoking the biggest advance in the benchmark index in three weeks, as data signaling manufacturing is expanding boosts prospects Asia’s largest economy is emerging from its slowdown.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 1.4 percent to 95.82 in New York, extending its jump this week to 2 percent. Suntech Power Holdings Co. (STP:US) led solar stocks higher as San Mateo, California- based SolarCity Corp. surged after its initial public offering. Sohu.com Inc. (SOHU:US) rose to a 12-week high after the U.S. removed the operator of China’s fifth-most visited website from a piracy list. Youku Tudou Inc. (YOKU:US) added 2.8 percent as Morgan Stanley rated the video website owner the equivalent of buy.
Manufacturing in China grew for the second month, according to a preliminary reading for December of a purchasing managers’ index compiled by HSBC Holdings Plc and Markit Economics. The result, which exceeded the median economist estimate, comes after reports this week showed factory output and retail sales climbed in November. The Shanghai Composite Index (SHCOMP), which has lost 26 percent in the past seven quarters as China’s economy slowed, soared the most since 2009 yesterday.
“Anyone who’s looking at China’s numbers, even the PMI yesterday, will have to see that it’s definitely turning the corner,” Chris Bertelsen, chief investment officer of Global Finance Private Capital, which manages $1.7 billion in assets including emerging-market stocks, said by phone yesterday from Sarasota, Florida. “This recovery will be durable and long lasting. China will be our leading investment in emerging markets in 2013.”
The iShares FTSE China 25 Index Fund (FXI:US), the biggest Chinese exchange-traded fund in the U.S., surged 1.8 percent to $39.34, a nine-month high. The Standard & Poor’s 500 Index fell 0.4 percent to 1,413.58 amid concerns over federal budget negotiations in the U.S.
The Hang Seng China Enterprises Index (HSCEI) climbed 1.5 percent yesterday and 3.6 percent in the week to a nine-month high of 11,307.42, while the Shanghai Composite jumped 4.3 percent to 2,150.63, the steepest one-day rally since October 2009. The gauge also rose 4.3 percent in the week.
The December preliminary reading was 50.9 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. That compares with the 50.8 median estimate in a Bloomberg News survey of 12 economists and a final reading of 50.5 for November, the first time in 13 months it was above the expansion-contraction dividing line of 50.
Suntech climbed 8.3 percent to $1.04, the highest since Sept. 21, the second-biggest gainer on the index of U.S.-listed Chinese stocks. The stock capped a 17 percent rally this week, the most in six weeks.
LDK Solar Co. (LDK:US) jumped 7.7 percent to $1.26, the highest price since Sept. 27. The solar company, which owes more than $3.1 billion, is seeking consent from noteholders to take on more debt. The company will offer noteholders 10 yuan ($1.60) for every 10,000 yuan they hold in its notes due in 2014, according to a filing today.
SolarCity Corp. (SCTY:US), the solar power provider led by billionaire Elon Musk, jumped 47 percent after raising $92 million in an initial public offering.
“Chinese solar companies are benefiting from SolarCity’s IPO and strong debut trading,” Aaron Chew, a senior analyst with Maxim Group LLC, said by phone from New York yesterday. “You have a successful solar IPO for the first time in years.”
Sohu jumped 3.4 percent to $42.24 after its website was removed the “Notorious Markets” list, the Office of the U.S. Trade Representative said in a Dec. 13 report. Sohu’s Sogou site reportedly made “notable efforts” to reduce inclusions of infringing content, it said. Jiang Xin, a spokeswoman for Sohu, declined to comment on the report.
Phoenix New Media Ltd. (FENG:US), a Beijing-based Internet, TV and mobile-news provider, rallied 4.1 percent yesterday to $3.52. The stock has advanced 10 percent for the week.
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