HONG KONG (Bloomberg) -- China's retail sales growth accelerated in April, fueled by rising incomes and a stock market boom that has prompted warnings of a speculative bubble.

Sales rose 15.5 percent from a year earlier to 667.3 billion yuan ($86.8 billion) after gaining 15.3 percent in March, the statistics bureau said on Tuesday. That was the biggest increase since May 2004 after adjusting for seasonal distortions. “This is encouraging,” said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. “But it's too early to say whether it can be sustained, because part of the increase was supported by the stock market.” Premier Wen Jiabao's drive to boost consumption and reduce dependence on exports and investment in the world's fourth- biggest economy may be derailed by a share market bust. The benchmark CSI 300 Index has climbed nearly 80 percent this year and Goldman Sachs Group Inc. cautioned May 10 that stocks may face a “correction.”

The increase in retail sales beat the 15.1 percent median estimate of 19 economists surveyed by Bloomberg News. For the first four months, sales increased 15.1 percent from the same period last year to 2.8 trillion yuan.

Gome Electrical Appliances Holdings Ltd., China's biggest electronics retailer, said profit surged 75 percent in the first quarter. Tsingtao Brewery Co., part-owned by Anheuser-Busch Cos., posted an 18 percent increase in net income. -----------Electronics, jewelry

Electronics sales increased 13 percent in April from a year earlier, while those of furniture jumped 53 percent. Jewelry sales rose 31 percent.

Among 724 executives in China, 61 percent said they will increase hiring in the second quarter, up from 59 percent in the previous three months, according to a survey by recruitment firm Hudson Global Resources.

China's economy grew 11.1 percent in the first quarter as exports boomed, flooding the financial system with cash. Households have switched money from bank deposits to shares. “I make about 5,000 yuan a month investing in stocks,” said Peng Li, 25, a student eating at the food court of the Mix C. Shopping Mall in Shenzhen. “I spend most of my money on eating and shopping with friends.”

The CSI 300 Index of yuan-denominated shares on the Shanghai and Shenzhen stock exchanges plunged 9 percent on Feb. 27, helping to trigger a global share rout.

China will strengthen implementation of minimum wages and improve public welfare to support consumption, Premier Wen told lawmakers at the annual meeting of the National People's Congress in March. --------------Disposable incomes

Disposable incomes in urban areas jumped 19.5 percent in the first quarter and rural households' earnings climbed 15.2 percent.

“Most Chinese people live in the country and the government needs to further boost rural incomes to expand consumption,” said Zuo Xiaolei, chief economist at China Galaxy Securities Co. in Beijing.

Retail spending in towns and cities jumped 16 percent in April from a year earlier. In rural areas, the increase was 14.6 percent.

The increased wealth of China's consumers is leading retailers to boost investment. Suning Appliance Co., China's second-biggest home appliance retailer, last month said it plans to raise about 2.4 billion yuan by selling shares to develop a chain of 250 outlets and two flagship shops in Shanghai and central Wuhan city.

Retail sales increased 13.7 percent in all of 2006. Economists often combine figures for the first two months of each year to eliminate Lunar New Year holiday distortions.