ASIA MARKETS: China Stocks Jump The Most In Four Months On Reform Plan

By Laura He, MarketWatch

Japan stocks close above 20,000 for first time in three weeks

HONG KONG (MarketWatch) -- Chinese stocks posted their biggest advance in nearly four months on Tuesday, after the government unveiled guidelines to reform its economic system in 2015, which includes further opening up capital markets.

The mainland China's benchmark Shanghai Composite Index rose 3.1% to 4,417.55, its highest settlement in two weeks. The index also marked its biggest daily percentage gain since late January.

The State Council, China's cabinet, said in a guideline published on Monday that the country needs deepen the economic system reform in 2015 by further opening up the financial sector to both foreign and domestic investors, expanding capital markets, and intensifying the reform of state-owned enterprises, according to the Chinese government's official website.

Financial shares rallied across the board, with brokers rising sharply. Huatai Securities Co. Ltd. , one of China's largest brokerage firms soared limit-up by 10%, after it kicked off its Hong Kong initial public offering on Monday, aiming to raise up to $4.5 billion. Orient Securities Co. Ltd. and Dongxing Securities Co., Ltd. also surged 10%. Haitong Securities and Citic Securities Co. Ltd. gained 7.5% and 6.6% respectively.

Banks also recorded a solid advance, with China Merchants Bank Co., Ltd. spiking 4.6%, and Bank of China Ltd , China Citic Bank Corporation Ltd. , China Construction Bank Corporation and China Minsheng Banking Corp., Ltd. all rallying 3%.

Railway stocks jumped, after China's top economic planning agency said Monday it gave the green light to six rail and subway projects, with a total investment of close to 250 billion yuan ($40 billion), to spur economic growth. China Communication Construction Co. Ltd. surged 10%, China Railway Construction Corporation Ltd. jumped 3.5% and China Railway Group Ltd. climbed 2.6%.

In Hong Kong, the benchmark Hang Seng Index also rose 0.4%, with the mainland-China-tracking Hang Seng China Enterprises popping 1.9% higher.

In other Asian markets, Japan's Nikkei Average also advanced 0.7% to 20,026.38, back above 20,000 for the first time in three weeks. The index had risen for a third day in a row. The broader Topix added 0.4%.

Then yen (USDJPY) weakened a little against the greenback, with the dollar buying Yen120.04, compared to Yen119.67 at the previous Tokyo stock close.

Elsewhere, Seoul's Kospi Composite Index tacked on 0.3%, while Sydney's S&P/ASX 200 fell 0.8%.

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