China shares rebound on better corporate earnings, led by energy and bank stocks

China shares up on better company earnings

SHANGHAI — Chinese shares rebounded Wednesday after a three-day drop as investors were cheered by improving corporate quarterly earnings. Energy stocks like Sinopec and bank shares like ICBC led the gains.

The benchmark Shanghai Composite Index rose 66.75 points, or 2.8 percent, to close at 2468.19. The Shenzhen Composite Index for China’s smaller second exchange rose 2.4 percent to 817.59.

First-quarter profits reported by 1,000 listed companies as of Monday totaled 66.6 billion yuan ($9.8 billion), compared with a cumulative loss of 6.1 billion yuan ($892 million) for the final quarter of 2008, the government newspaper China Securities Journal reported.

“The corporate earnings are encouraging, but also pretty much expected. This is a technical recovery after the slide. Investors were buying low with caution,” said Zhou Lin, an analyst for Huatai Securities in the eastern city of Nanjing.

China Petroleum & Chemical Corp., or Sinopec, Asia’s largest refiner by capacity, rose 2.9 percent to 9.71 yuan after reporting Wednesday its first-quarter profit rose 85 percent. PetroChina Ltd., Asia’s biggest oil and gas producer, rose 1.2 percent to 11.6 yuan.

China Shenhua Energy Ltd., the country’s biggest coal producer, jumped 3.1 percent to 24.74 yuan, also on strong earnings for the first quarter.

Bank shares recovered after the chairman of China’s Banking Regulatory Commission, Liu Mingkang was quoted by the government newspaper Shanghai Securities News as saying there would be no upper limit on bank lending this year.

Industrial & Commercial Bank of China Ltd., China’s biggest commercial lender, climbed 2.5 percent to 4.11 yuan. No. 2 China Construction Bank Ltd. rose 2.6 percent to 4.43 yuan.

Shanghai-related shares shot up after the China’s Cabinet released plans Wednesday to support the city’s development as the country’s international financial and transportation center.

Pudong Development Bank Ltd. soared 9.6 percent to yuan while Shanghai Industrial Development Co. surged 8.7 percent to 13.69 yuan. SAIC Motor Corp., an automaker that is the local partner of General Motors Corp. and Volkswagen AG, gained 7.2 percent to 11.47 yuan.

In currency markets, the yuan strengthened to 6.8251 to the U.S. dollar, up from Wednesday’s close of 6.82543.