[HONG KONG] Chinese stocks rose, with the benchmark index climbing to its highest level since August 2009, after Premier Li Keqiang pledged to take action if economic growth slows too much and the benchmark money-market rate fell.
Hundsun Technologies Inc and Glodon Software Co surged more than 9 per cent as a gauge of technology shares extended its gain this year to 40 per cent after Mr Li encouraged the development of e-commerce. China Mobile Ltd advanced the most in a month in Hong Kong. Huadong Medicine Co jumped by the 10 per cent daily limit to lead consumer shares higher. The seven-day repurchase rate slid the most in five weeks as funds locked up for new share sales returned to the banking system.
The Shanghai Composite Index climbed 2.3 per cent to 3,449.31 at the close, extending last week's 4.1 per cent increase. Li said Sunday the government will take additional steps if China's growth, which the government targeted at about 7 per cent this year, drifts toward the lower limit of its range and cuts into employment or wages. About 3 trillion yuan (S$676 billion) was set aside for initial public offerings last week, according to the median estimate in a Bloomberg survey of brokerages.
"Li's positive tone on growth bolstered investor confidence," said Yen Chiu, a trader at Shenwan Hongyuan Group Co in Hong Kong. "Technology stocks are getting a boost on the economy's reliance on the sector for growth."
The CSI 300 Index rose 2.4 per cent. Hong Kong's Hang Seng China Enterprises Index added 0.9 per cent and the Hang Seng Index gained 0.5 per cent. The Bloomberg China-US Equity Index slid 0.9 per cent in New York on Friday.
A gauge of technology shares climbed 4.1 per cent, the most among the 10 industry groups on the CSI 300. The ChiNext index advanced 3.6 per cent. Hundsun Technologies soared to a record and Glodon Software jumped by the 10 per cent maximum.
Earnings for Chinese technology companies have been revised upwards by 14 per cent in the past month, compared with a one per cent downward revision for the CSI 300 as a whole, according to HSBC Holdings Plc analysts including Roger Xie in a report dated March 13.
Indexes tracking consumer staples companies and drugmakers rallied more than 2.4 per cent. Huadong Medicine rose to a record and Zhangzhou Pientzehuang Pharmaceutical Co gained 5.7 per cent.
The seven-day repurchase rate, a gauge of interbank funding availability, dropped 10 basis points to 4.6155 per cent, according to a weighted average from the National Interbank Funding Center. That was the biggest decline since Feb 5.
Trading in Shanghai was 44 per cent above the 30-day average at the close. The gauge is valued at 12.7 times 12-month projected earnings, compared with the five-year average multiple of 10.2, according to data compiled by Bloomberg.
Margin traders increased holdings of shares purchased with borrowed money for a 13th day on Friday, with the outstanding balance of margin debt on the Shanghai Stock Exchange rising to a record 880.6 billion yuan.
A gauge of Macau casino stocks dropped to its lowest level since December 2012 after Morgan Stanley predicted a 25 per cent drop in the city's gambling revenue this year. MGM China Holdings Ltd fell 3 per cent and Sands China Ltd slid 1.4 per cent.
Investors are rushing to buy protection against declines in Chinese stocks amid concern an economic slowdown will undermine their world-beating rally.
Demand to hedge against future losses on the largest US exchange-traded fund tracking China's mainland market climbed to the highest since the ETF was created in November 2013, according to data compiled by Bloomberg. The buying pushed the ratio of bearish to bullish contracts to a five-month high on March 11 as investors pulled US$34 million from the fund in a second week of outflows.
While the economy is growing at the slowest pace since 1990, the Shanghai Composite has jumped 64 per cent in the past year through last week, the best performance among major equity gauges tracked by Bloomberg.
China's total public and private debt has increased to more than twice the nation's economic output, soaring 83 per centage points relative to gross domestic product since 2007. No other developing country has amassed as much debt as quickly, according to data compiled by McKinsey Global Institute.