China’s stocks rebounded from the biggest drop in seven weeks after the economy expanded more than estimated last quarter, easing concerns the central bank’s policy tightening measures are curbing growth. Jiangxi Copper Co., the nation’s biggest producer of the metal, surged 3.5 percent after China’s economic growth exceeded estimates. Agricultural Bank of China Ltd. (601288) and Shenzhen Development Bank Co. (000001) led an advance for financial stocks after forecasting higher profit. Zijin Mining Group Co., China’s largest gold producer, rose to the highest level in four months as spot bullion jumped to a record. “The data suggest China’s economy is growing at a moderate pace but still pretty healthy,” said Zhang Ling, general manager at Shanghai River Fund Management Co. “We’ll focus on inflation figures going forward. If that’s brought under control, growth will pick up again and that’ll be positive for stocks.” The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, climbed 33.14 points, or 1.2 percent, to 2,787.72 at the 11:30 a.m. local-time break. It dropped 1.7 percent yesterday. The CSI 300 Index (SHSZ300) advanced 1.4 percent to 3,099.28, led by material and energy stocks. The Shanghai gauge has fallen 0.8 percent this year on speculation the economy may be headed for a so-called hard landing after the central bank raised interest rates five times and the reserve-requirement ratio 12 times since the start of 2010 to tame inflation that reached a three-year high last month. GDP Report China’s gross domestic product expanded 9.5 percent from a year earlier, the statistics bureau said in Beijing today, after a 9.7 percent gain in the first quarter. That compared with the median 9.3 percent estimate in a Bloomberg News survey of 18 economists. Industrial production rose a more-than-estimated 15.1 percent in June, the agency said. Jiangxi Copper gained for the first time in five days, rising 3.5 percent to 36.10 yuan. First-half net income likely climbed by more than 50 percent from a year earlier on higher output and sale prices, the company said in a statement. Tongling Nonferrous Metals Group Co., China’s second- biggest copper producer, added 2.7 percent to 24.94 yuan. Yunnan Copper Industry Co. (000878), the fourth-biggest, gained 2.6 percent to 22.41 yuan. The metal for September delivery on the Shanghai Futures Exchange rose 1.1 percent to 71,900 yuan ($11,132) a ton. Earnings Forecast Zijin Mining led gains for bullion producers, advancing 5 percent to 5.48 yuan. Zhongjin Gold Corp., China’s third-largest bullion producer, added 4.4 percent to 29.04 yuan. Spot gold jumped to an all-time high in Shanghai as investors sought to protect their wealth on concern the escalating debt crisis in Europe may trigger a global slowdown. AgriBank, the nation’s fourth largest by assets, climbed 1.5 percent to 2.70 yuan after it estimated net income for the first six months of the year may have risen more than 45 percent from a year earlier. Shenzhen Bank gained 4.1 percent to 17.70 yuan after saying first-half net income may have risen between 50 percent and 60 percent to as much as 4.85 billion yuan. The Shanghai gauge fell the most in seven weeks yesterday on speculation a European debt crisis may spread and higher- than-estimated new loans and money supply will make it difficult for the government to ease its tightening policies. China may not have conditions for loosening in its monetary policy currently, the Economic Information Daily reported today, citing Ba Shusong, a researcher at the State Council’s Development Research Center. Ireland Cut Pork prices in China may remain at a high level until April of next year as the amount of the meat in stock is limited, the 21st Century Business Herald reported, citing Liu Tong, director of the Xinfadi market in Beijing. The Standard & Poor’s 500 Index dropped 0.4 percent in New York yesterday after the downgrading of Ireland’s credit rating to junk added to concerns Europe is losing control of the credit crisis and overshadowed evidence the Federal Reserve hasn’t ruled out more stimulus. Ireland’s credit rating was cut to Ba1, non-investment grade, from Baa3 by Moody’s Investor Service, joining Portugal and Greece to become the third euro-area country to be lowered to junk. The outlook remains negative. Portugal’s rating was cut four levels to Ba2 on July 5 by Moody’s. The European Union is China’s biggest export market, accounting for about a fifth of the Asian nation’s overseas shipments. BYD Co., the automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc., declined 1.8 percent to 30.94 yuan. The company said first-half profit fell as much as 95 percent after sales fell because of the end of preferential taxes for small cars. --Zhang Shidong. Editors: Allen Wan, Shiyin Chen To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at +86-21-6104-3040 or szhang5@bloomberg.net To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net

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