STOCKS rose to a two-month high as commodity companies rallied and speculation grew the nation may provide stimulus to support growth. Hong Kong equities erased losses accumulated after the United Kingdom voted to leave the European Union.

    The Shanghai Composite Index advanced 1.9 percent at the close as a gauge of materials producers rose the most since May. The Hang Seng Index extended its increase since Britain’s referendum to 0.9 percent, as London-based HSBC Holdings paced moves by companies with links to Europe.

    Speculation that global central banks will act to contain the fallout from the U.K. vote has underpinned a rebound in riskier assets, boosting precious metals and other commodities. While China has left its main rates at a record low since October, analysts at Standard Chartered and Commerzbank AG expect the nation’s central bank to lower lenders’ reserve requirements as soon as in July to boost economic growth.

    “The market is expecting some stimulus policy” following disappointing Chinese economic data and Britain’s decision to leave the European Union, said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities. “Chinese stocks are still in a good run. The Shanghai Composite may test the 3,000 resistance level.”

    Chinese industrial companies’ profits climbed 3.7 percent in May from a year earlier, the government said last week, slowing after a 4.2 percent growth the previous month. The nation’s manufacturing purchasing managers index stood at 50 in June, the line dividing improvement from deterioration, data showed Friday.

    The Shanghai Composite climbed to 2,988.60, paring this year’s loss to 16 percent, still among the world’s worst-performing benchmarks of 2016. The Shenzhen Composite added 1.6 percent after falling as much as 0.8 percent.(SD-Agencies)