China stocks advance to fresh 7-year highs ahead of earnings season
SHANGHAI, April 7 (Reuters) - China stocks jumped more than 2 percent to fresh seven-year highs on Tuesday ahead of the quarterly earnings season, as investors brushed aside liquidity concerns after the official Xinhua news agency said an acceleration in initial public offerings would not stop the market's bull run.
Last week, China's securities regulator approved 30 IPOs for April, compared with 24 in each of the previous two months, triggering fears that stepped-up share sales could pause the market's rally.
But Xinhua said in an article that the current pace of IPOs has negligible impact on the stock market, as regulators hope to channel some of the heavy money inflows into the real economy.
Investors also drew confidence from the stellar performance of Beijing Water Business Doctor Co Ltd, which kicked off the earnings season with a 376 percent surge in first-quarter net profit.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.2 percent, to 4,260.04, while the Shanghai Composite Index gained 2.5 percent, to 3,961.38 points.
Both indexes hit their highest levels since March 2008, making China the best-performing stock market in the Asia-Pacific region so far this year.
Transportation, telecom, and machinery stocks rose sharply, as investors bet they would benefit the most from Beijing's push toward overseas expansion.
The banking share index jumped nearly 3 percent, after China published rules to expedite the sale of asset-backed securities. Analysts say the new rules would help banks move risky assets out of their balance sheets and generate fresh cash for new businesses.
Among the most active stocks in Shanghai were Agricultural Bank of China, up 2.7 percent to 3.76 yuan; Bank of China, up 2.3 percent to 4.47 yuan and Everbright Bank, up 4.4 percent to 5.04 yuan.
In Shenzhen, BOE Technology, up 3.4 percent to 4.29 yuan; Hebei Steel, up 1.4 percent to 4.98 yuan and TCL Corp, up 4.2 percent to 6.44 yuan were among the most actively traded.
Total volume of A shares traded in Shanghai was 56.8 billion shares, while Shenzhen volume was 34.4 billion shares. (Reporting by Samuel Shen and Pete Sweeney; Editing by Jacqueline Wong)
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