Shanghai - China's stocks rose for a third day, as PetroChina Co and Industrial and Commercial Bank of China Ltd rallied on speculation a growing economy will bolster earnings for the nation's biggest banks and energy producers.
PetroChina led gains for oil producers after its majority shareholder reported a profit jump of 30 percent. ICBC, the world's largest lender by market value, climbed to the highest in a month after the World Bank said China's economy will grow 8.7 percent in 2011.
"China's economists are even more optimistic than the World Bank about the nation's economic growth," said Wang Cheng, a strategist at Guotai Junan Securities Co in Shanghai. "The growth, if not hammered by the government's tightening policies, will help companies' earnings."
The Shanghai Composite Index erased earlier declines, adding 6.4, or 0.2 percent to 2827.71 at the close on Thursday. The CSI 300 Index slipped less than 0.1 percent to 3141.28.
The Shanghai gauge has gained 0.7 percent this year as large banks and property companies rebounded on speculation the government will be able to sustain economic growth while taming inflation.
PetroChina, the nation's largest oil company, climbed 1.4 percent to 11.40 yuan ($1.72). China Petroleum and Chemical Corp jumped 2.2 percent to 8.54 yuan.
China National Petroleum Corp, the majority shareholder in PetroChina, earned 167.6 billion yuan last year, President Jiang Jiemin said in a statement on Thursday, without specifying whether the income was before or after tax.
ICBC increased 1.2 percent to 4.34 yuan, the highest close since Dec 6. ICBC Chairman Jiang Jianqing said on Wednesday that the bank has no plan to seek financing from the capital markets within three years. Agricultural Bank of China Ltd, the third biggest, rose 0.8 percent to 2.68 yuan.
The nation's growth will ease due in part to fiscal restrictions placed on "overheating sectors", such as housing, and tighter monetary policy to help reduce price increases, the World Bank said in a report on Thursday. The lender forecast China's economy will grow 8.4 in 2012.
The economy grew 10.1 percent last year, according to the median estimate of 18 economists in a Bloomberg survey. The expansion may slow to 9 percent this year, still three times the rate of the United States and six times the speed of the eurozone, Bloomberg surveys indicate.
China has considerable scope to increase interest rates further, Vikram Nehru, the World Bank's chief economist for East Asia and Pacific, told a briefing in Beijing.
Consumer prices may have increased as much as 3.5 percent in 2010, the People's Daily reported on Thursday, citing the National Bureau of Statistics chief economist Yao Jingyuan. The government's inflation target for last year was 3 percent.
Shanghai may impose a property tax of 0.5 to 0.6 percent on buyers of new homes exceeding 70 square meters of area per person, China Securities Journal reported, citing an unidentified official at the National Development and Reform Commission's Shanghai branch.
(China Daily 01/14/2011 page17)