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China shares rebound, led by consumer goods stocks

China shares rebound, led by consumer goods stocks

Chinese shares rebounded Friday, led by consumer goods companies on expectations of higher prices, ending the week up by 0.3 percent.
The benchmark Shanghai Composite Index edged up 6.86 points, or 0.3 percent, to close at 2,663.21. The Shenzhen Composite Index for China's smaller second exchange added 0.7 percent to 1,187.44.
Consumer goods stocks powered the rally on expectation August inflation due to be announced Saturday might hit a high for the year. Consumer goods companies are seen as a hedge against inflation because they can increase prices most easily.
"Speculative capital turned to smaller shares, while investors were wary about heavyweights due to policy uncertainty," said Zhang Xiang, an analyst for Guodu Securities in Beijing.
Zhang said investors were particularly concerned that the government might impose more housing curbs after home prices in August rose again.
Yantai Changyu Pioneer Wine Co. soared 7.1 percent to 99.2 yuan, while Suning Appliance Co., a major home appliance franchiser, rose 1 percent to 15.02 yuan.
Pharmaceutical shares soared after the government warned about possible new drug-resistant bacteria. Beijing Tongrentang Co., a traditional Chinese medicine maker, soared by the daily 10 percent maximum to 29.52 yuan, while Hualan Biological Engineering Inc. added 9.2 percent to 54.49 yuan.
Real estate developers fell again. Poly Real Estate Group, China's second-biggest developer, lost 1.8 percent to 11.12 yuan, while rival China Vanke Ltd. shed 1.5 percent to 8.16 yuan.
In currency markets, the yuan strengthened to 6.7674 to the U.S. dollar from Thursday's close of 6.7860.
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Associated Press researcher Bonnie Cao in Beijing contributed to this report.


Updated : 2021-05-19 11:07 GMT+08:00