(Bloomberg) -- Chinese stocks rose as industrial companies jumped on prospects the government will boost spending on railways to bridges, while optimism the start of a Shenzhen-Hong Kong exchange link is imminent lifted brokerages.
The Shanghai Composite Index climbed 0.8 percent at the close. A gauge of industrial shares surged 2.4 percent, the biggest gain since Aug. 15, as China Communications Construction Co. and China Railway Group Ltd. rallied more than 5 percent. Guoyuan Securities Co. rose to its highest level in almost a year to lead financial companies higher.
Industrial, construction and state-owned firms have powered gains in the Shanghai Composite Index in recent weeks as investors bet that the government will favor infrastructure projects and fiscal spending to bolster growth. The nation's official manufacturing gauge rose to the highest in two years last month, led by new orders. The China Securities Depository and Clearing Corp. said this week that it would conduct mock trade tests on Nov. 5-6 for the link, which was unveiled in August.
"The continuation of a recent theme is helping the industrials -- government policy will remain supportive of fiscal spending and infrastructure projects to support growth," said Bill Bowler, a sales trader at Forsyth Barr Asia Ltd. in Hong Kong. "The recent better-than-expected PMI data has validated that."
An index of financial companies on the CSI 300 Index added 1 percent.
"There are expectations that the starting day of the Shenzhen connect will be announced over the weekend, and that's driving the rally on brokerages," said Wu Kan, a fund manager at Shanshan Finance Co. in Shanghai.
To contact Bloomberg News staff for this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net, Zhang Shidong in Shanghai at szhang5@bloomberg.net. To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Philip Glamann
With assistance from Zhang Shidong, Kana Nishizawa
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