China¡¯s Stocks Rally Most in 4 Months; Aluminum Corp. Gains

China¡¯s stocks rose, driving the benchmark index to its biggest gain in four months, on speculation the government will announce new stimulus measures to revive the world¡¯s third-largest economy.

Aluminum Corp. of China Ltd. and Jiangxi Copper Co. surged at least 8 percent after the former statistics bureau head Li Deshui said Premier Wen Jiabao will announce a new ¡°stimulus package¡± tomorrow in his annual address to the nation¡¯s legislature. Stocks also gained after the official manufacturing index rose for a third month, signaling that the economy may be edging closer to a recovery.

¡°It¡¯s important for the Chinese government not to lose momentum in stimulating the economy,¡± said Winson Fong, who helps manage $2 billion at SG Asset Management H.K. Ltd. ¡°It¡¯s encouraging that the economy seems to be responding.¡±

The benchmark Shanghai Composite Index jumped 6.1 percent to 2,198.11 at the 3 p.m. local-time close. That¡¯s the biggest gain since Nov. 10, when it climbed 7.2 percent after the government announced its 4 trillion yuan ($585 billion) spending plan. Only one stock dropped on the 896-member measure today.

The CSI 300 Index, which tracks shares on both the Shanghai and Shenzhen exchanges, rose 6.7 percent.

The Shanghai Composite has rallied 21 percent this year, the world¡¯s best performer, on expectations the government¡¯s spending plan will support earnings after an exports collapse dragged the economy to its weakest growth in seven years.

¡°In Premier Wen¡¯s report tomorrow, there will be an announcement of a new stimulus package,¡± Li said when asked by reporters if China would double or triple the 4 trillion yuan package. Li, also a former member of the central bank¡¯s monetary-policy committee, spoke in Beijing today.

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