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China shares rise on expectation of higher prices

China shares rise on expectation of higher prices

Chinese shares rose for a fourth day Monday on expectations real estate and consumer prices will rise as the economy begins to recover, helping producers to restore profit margins.
The benchmark Shanghai Composite Index jumped 47.1 points, or 1.6 percent, to close at 2975.31, a new one-year high. The Shenzhen Composite Index for China's smaller second exchange added 1 percent to 968.54.
Investors were encouraged by a growing consensus that a recovery from China's slump is beginning, analysts said. That would fuel demand, pushing up real estate prices and allowing producers to raise prices and restore falling profit margins.
"Investors are speculating on a 'price-raising concept' as such expectation is high across industries," said Zhai Peng, an analyst for Guotai Junan Securities in Shanghai.
Markets shrugged off weekend comments by China's central bank governor that there will be no sudden changes in its policy on foreign exchange reserves, analysts said. The comments helped to push up the dollar on markets abroad.
China Shenhua Energy Ltd., the country's biggest coal producer, surged 7.9 percent to 29.82 yuan, while Kailuan Clean Coal Ltd. advanced 7.1 percent to 18.79 yuan.
Oil stocks rose on expectation the government would soon raise state-set gasoline and diesel prices. PetroChina Ltd., Asia's biggest oil and gas producer, rose 3.4 percent to 14.47 yuan, and rival Sinopec, also known as China Petroleum & Chemical Corp., gained 1.2 percent to 10.59 yuan.
China Vanke Ltd., the country's biggest developer, climbed by 2.3 percent to 12.89 yuan, while Poly Real Estate Group added 4.1 percent to 27.73 yuan.
Liquor producers rose on expectations of higher demand. Kweichow Moutai Co. soared 7.8 percent to 147.72 yuan, and Wuliangye Yibin Co. leaped 4.9 percent to 19.84 yuan.
In currency markets, the yuan strengthened to 6.8337 to the U.S. dollar, up from Friday's close of 6.8352.


Updated : 2021-07-30 02:43 GMT+08:00