SHANGHAI stocks inched up yesterday as small-cap media and technology companies received a boost from the Chinese government’s tax breaks for more small enterprises.

The Shanghai Composite Index added 0.33 percent, or 6.95 points, to 2,105.24.

Companies with annual income of 100,000 yuan (US$16,128) or less will have their business income tax halved, retroactive to January 1 and valid until the end of 2016, the Ministry of Finance and the State Administration of Taxation said in a joint statement late on Tuesday.

In 2011, the State Council, China’s Cabinet, ruled that companies earning below 60,000 yuan a year will have their income tax halved from 2012 to 2015.

The extension of the tax cut came after the State Council unveiled stimulus measures last week.

“The tax breaks will invigorate small companies, help employment and stabilize economic growth,” Shenyin & Wanguo Securities said in a note yesterday.

Beijing Gehua CATV Network Co added 7.5 percent to 9.13 yuan. Jiangsu Phoenix Publishing & Media Corp rose 2.1 percent to 9.34 yuan.

Hundsun Technologies Inc surged by the daily limit of 10 percent to 25.98 yuan. Weifang Beida Jadebird Huaguang Technology Co gained 3.5 percent to 5.07 yuan.

Analysts were split over the market outlook. CITIC Securities said yesterday that the short-term rebound is ending because economic growth may be weaker than expected in the second quarter. But Guotai Jun’an Securities predicted a rebound of over 20 percent in the second quarter as economic weakness has been priced in.