China's shares rise, led by real estate and financial stocks on economic optimism

Thu, Jul 24 03:52 PM

SHANGHAI, China (AP) _ Chinese shares rose Thursday, led by gains in real estate and financial stocks on optimism that lower oil prices might ease inflation pressure and improve the economy's outlook in the second half. The benchmark Shanghai Composite Index rose 2.55 percent to close at 2910.29.

The Shenzhen Composite Index jumped 2.43 percent to 866.64 at the close. "Investors are acting as if they believe the economy will achieve a soft landing in the second half.

Government statistics show the Chinese economy is slowing down, but it's in general still doing well," said Zhang Linchang, an analyst for Guotai Junan Securities. Poly Real Estate Group climbed by 9.95 percent, nearing the maximum 10 percent daily limit.

Its major rival China Vanke Ltd., the country's biggest listed property developer, added 6.66 percent.

China's biggest commercial lender, Industrial & Commercial Bank of China Ltd., rose 2.38 percent, while midsize lender Pudong Development Bank Ltd.

surged 8.17 percent. China Petroleum & Chemical Corp.

, also known as Sinopec, Asia's biggest refiner, added 1.25 percent. PetroChina Ltd.

, the country's biggest oil producer, rose 2.97 percent. Investors were encouraged by the U.S. Federal Reserve's plans to help troubled mortgage lenders Fannie Mae and Freddie Mac, as well as dipping oil prices.

Light, sweet crude for September delivery was changing hands Thursday around US$125 a barrel in Asian electronic trade on the New York Mercantile Exchange. That's down more than US$20 in less than two weeks and eases pressure on Chinese refiners, which are chafing under government price controls that limit their ability to pass on high crude costs to consumers.

"It's certainly great news to refiners that oil prices are dropping," Zhang said. Lower crude oil prices will cut refiners' costs and give the government more room to curb inflation, he said.

The government is trying to cool an annual inflation rate that hit 7.1 percent in June well above the government's target of 4.8 percent for the year. In currency markets, China's yuan rose slightly to 6.8290 to the U.S. dollar.

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