SHANGHAI, China – Chinese shares shrugged off losses elsewhere in Asia to rise Wednesday on a rally in refiners and renewed enthusiasm about a government stimulus package.
The benchmark Shanghai Composite Index climbed 6.1 percent, or 115.04 points, to close at 2017.47. The Shenzhen Composite Index for China's smaller second exchange jumped 6.2 percent to 557.31.
After taking a breather Tuesday, when the main index fell 6.3 percent, the market resumed a rally sparked by last week's announcement of a $586 billion government stimulus package. Investment funds that had been on the sidelines joined in the buying.
"The multibillion-dollar economic stimulus package was not just a one-time thing, but a beginning for a series of government policies to follow, which will give a strong support to the Chinese economy next year," said Zhai Peng, analyst for Guotai Junan Securities.
But he cautioned that it usually takes a half-year to see the effect of fiscal policies.
Oil stocks rose after government officials said China would move ahead with plans to overhaul fuel prices and introduce a fuel tax.
"Changes of the pricing system definitely is good news for oil companies," said Zhang Liyang, energy analyst for Everbright Securities in Shanghai.
Profits of Chinese oil companies have long been squeezed by government controls that blocked them from passing on high crude costs to consumers. The recent falloff in oil prices and a decline in Chinese inflation has given the government room to introduce a tax meant to restrain consumption growth.
China Petroleum & Chemical Corp., also known as Sinopec, Asia's biggest oil refiner by volume, surged by the daily limit of 10 percent to 8.37 yuan. PetroChina Ltd., Asia's biggest oil producer and the biggest-capitalized Chinese company, advanced 7.5 percent to 11.91 yuan.
Light, sweet crude for December delivery fell below $55 a barrel on the New York Mercantile Exchange.
Telecoms shares rose after China United Telecom Ltd.'s president said the industry is hoping the government will issue licenses for third-generation mobile phone services by the end of the year.
China United Telecom Ltd. and ZTE corp. both rose 10 percent, ending at 6.03 yuan and 9.67 yuan respectively.
Small and midsize banks also gained. Pudong Development Bank Ltd. climbed 7.5 percent to 14.76 yuan, and China Citic Bank Corp. jumped 6.5 percent to 4.42 yuan.
Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, rose 3.5 percent to 4.14 yuan, Bank of China Ltd. gained 3.3 percent gain to 3.48 yuan, and China Construction Bank, Ltd. rose 4.2 percent to 4.47 yuan.
In currency markets, China's yuan weakened to 6.8288 to the U.S. dollar in late afternoon trading, down from Tuesday's close of 6.8246.