Shanghai index rises as inflation decreases
By Ye Zhen |
August 10, 2012, Friday
|
Print Edition
Print Edition
SHANGHAI shares increased for a fifth straight day yesterday after the inflation rate for July dropped to the slowest pace in 30 months, giving policymakers greater leeway to loosen monetary policy.
The Shanghai Composite Index rose 0.61 percent to settle at 2,174.1 points, the highest since July 19.
The Consumer Price Index, a main gauge of inflation, rose 1.8 percent from a year earlier in July, down from 2.2 percent in June, the National Bureau of Statistics said yesterday.
The CPI was in line with expectations of less than 2 percent, said Guo Tianyong, banking research director at the Central University of Finance and Economics. Guo attributed the cooling inflation to declining demand amid a sluggish economy.
Other data released yesterday showed production prices declined more than expected and industrial output expanded at a slower pace, indicating the economy continued to slow last month. Industrial output rose 9.2 percent in July from a year earlier, slower than a 9.5 percent increase in June.
Li Xunlei, chief economist at Haitong Securities, said the central bank is likely to cut the reserve requirement ratio once or twice in the remaining months of this year to revitalize the economy.
Poly Real Estate Group climbed 1.6 percent to 10.92 yuan (US$1.72) after the country's second-biggest listed developer reported sales volume jumped 66 percent last month compared with a year ago, while sales value surged 80 percent.
Gemdale Corp advanced 2.2 percent to 5.67 yuan.
The Shanghai Composite Index rose 0.61 percent to settle at 2,174.1 points, the highest since July 19.
The Consumer Price Index, a main gauge of inflation, rose 1.8 percent from a year earlier in July, down from 2.2 percent in June, the National Bureau of Statistics said yesterday.
The CPI was in line with expectations of less than 2 percent, said Guo Tianyong, banking research director at the Central University of Finance and Economics. Guo attributed the cooling inflation to declining demand amid a sluggish economy.
Other data released yesterday showed production prices declined more than expected and industrial output expanded at a slower pace, indicating the economy continued to slow last month. Industrial output rose 9.2 percent in July from a year earlier, slower than a 9.5 percent increase in June.
Li Xunlei, chief economist at Haitong Securities, said the central bank is likely to cut the reserve requirement ratio once or twice in the remaining months of this year to revitalize the economy.
Poly Real Estate Group climbed 1.6 percent to 10.92 yuan (US$1.72) after the country's second-biggest listed developer reported sales volume jumped 66 percent last month compared with a year ago, while sales value surged 80 percent.
Gemdale Corp advanced 2.2 percent to 5.67 yuan.
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