CPI hopes push stocks up by 2%

By Ding Yining  |   2008-12-11  |     NEWSPAPER EDITION

SHANGHAI'S key stock index added more than 2 percent yesterday, after falling in the first half of trading, on anticipation of better-than-expected economic statistics to be announced today.

The Shanghai Composite Index increased 2.03 percent, or 41.38 points, to close at 2,079.12. Turnover was 93.0 billion yuan (US$13.5 billion). Gainers outnumbered losers 806 to 63 with 38 unchanged.

November's Producer Price Index, the factory-gate inflation figure, dropped to 2 percent, according to the National Bureau of Statistics.

"The Consumer Price Index of the previous month scheduled to be announced on Thursday is likely to beat previous predictions, which will help recovering confidence of the market and we suggest investors pay attention to the financial sector in the short term," GF Securities said in a research note.

Banks led the surge after Tuesday's announcement by the China Banking Regulatory Commission to allow commercial banks to finance mergers and acquisitions. The Industrial and Commercial Bank of China climbed 2.77 percent to 4.08 yuan. China Construction Bank added 3.44 percent to 4.51 yuan. The Shanghai Pudong Development Bank rallied 9.05 percent to 15.43 yuan. China Merchants Bank Co advanced 6.82 percent to 14.40 yuan.