China’s benchmark Shanghai Composite Index rallied for a fifth day to a seven-year high as investors sought underperforming companies and rotated out of overvalued, small-company stocks.
Financial and utility companies led gains with Citic Securities Co., Haitong Securities Co., Huadian Power International Corp. and GD Power Development Co. advancing more than 2 percent. Beijing VRV Software Corp. and Feitian Technologies Co. paced declines for companies in the ChiNext index of smaller companies, slumping at least 5 percent.
The Shanghai Composite climbed 2.6 percent to 4,780.55 at 1:05 p.m., heading for the highest close since January 2008. The ChiNext slid 1 percent, trimming a loss of as much as 4.2 percent. The ChiNext is valued at 115 times reported earnings, compared with the Shanghai Composite’s multiple of 24 times, according to data compiled by Bloomberg.