Stock markets in Shanghai and Shenzhen posted victories Thursday in large part due to hopes that a drop in consumer inflation in July would pave the way for the government to loosen its monetary policy in the weeks ahead.
The Shanghai Composite Index climbed 13.11 points, or 0.61 percent, to close at 2,174.10; while the Shenzhen Component Index edged up 1.38 percent, or 126.87 points, to finish at 9,337.54.
Both benchmarks opened lower Thursday and a sharp drop in banking stocks weighed on the indices at the start of the trading day. Later gains in brewing, real estate and medical stocks, combined with a renewed surge in investor confidence thanks to the release of inflation data that largely met the market's expectations, helped both benchmarks close out afternoon trading in the black.
According to data issued Thursday by the National Bureau of Statistics, China's consumer price index (CPI) dropped to 1.8 percent in July, the lowest level in 30 months. With the inflation rate below 2 percent, many investors expect China's central bank to roll out fresh stimulus measures later this month aimed at reviving the anemic domestic economy, say analysts.
Chinese property developers posted strong gains largely on hopes that the real estate industry would soon be receiving policy support, as an inspection ordered by the State Council of local property markets wrapped up Monday, according to a report Thursday by the 21st Century Business Herald.
Poly Real Estate Group added 1.58 percent to 10.92 yuan ($1.71) on the news, while China Merchant Real Estate Group added 1.12 percent to 21.58 yuan.
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