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Shanghai - Chinese shares rose in afternoon trading, with consumer and industrial stocks leading the advance.
The Shanghai Composite Index climbed 0.5%, the most in three weeks, after declining earlier. Great Wall Motor added 2% after reporting a jump in sales, while CSSC Offshore & Marine Engineering Group Company advanced 3.2%.
A gauge of Chinese stocks traded in Hong Kong was headed for the highest close since December, while the ChiNext measure of smaller companies rose to a one-month high.
Global equities and emerging-market assets have gained ground since American payrolls data on Friday helped damp the likelihood of a US interest-rate increase this month. While the Federal Reserve is pondering tightening monetary policy, its counterparts across much of Asia and Europe are in the midst of easing cycles.
Hong Kong stocks have risen 14% this quarter in Asia’s best performance.
The Shanghai Composite, which has moved less than 1 percent on a daily closing basis in the past three weeks, was trading at 3 087.48 as of 2:23 p.m. local time. The Hang Seng Index climbed 0.5%, with its 14-day relative strength gauge rising to 76.5, beyond the 70 level that suggests to some traders a rally is overdone.
HSBC Holdings erased the day’s losses to advance from an eight-month high. It was last trading up 0.6% after its 14-day relative strength index surged to levels last seen before Britain returned Hong Kong to China.
"The market is overbought and overheated in the short term," said Wu Kan, a fund manager at JK Life Insurance Company in Shanghai, in a reference to Hong Kong stocks.
"A one-day big drop or wild fluctuation is very likely to happen any time. From the valuation perspective, the market is still cheaper than the mainland market even after the rebound."
Gree Electric Appliances, China’s largest maker of home air-conditioners, surged 7% on the mainland, after two days of gains as it resumed trading following a seven-month suspension.
Beijing Water Business Doctor Company and Julong Company paced increases among companies on the ChiNext index with advances of at least 6%.
China is scheduled to release a set of August economic data this week, with foreign trade due on Thursday and inflation the following day. Exports probably fell 4% from a year earlier while inflation slowed to 1.7%, according to median estimates in Bloomberg surveys.
An official factory gauge published last week showed manufacturing unexpectedly rose to the highest level in almost two years in August.
Tencent Holdings added 2% in Hong Kong after surpassing China Mobile to become China’s most valuable corporation.
Sino Land Company climbed 0.2%, while AIA Group dropped 0.6%. Guangzhou Automobile Group Company gained 5.1% after saying vehicle sales increased in August.
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