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1st LD-Writethru: Chinese shares close higher on inflation data

Xinhua, April 11, 2016 Adjust font size:

China's stocks closed higher on Monday as lower-than-forecast inflation data fueled investor optimism, with the benchmark Shanghai Composite Index up 1.64 percent to close at 3,033.96 points.

The smaller Shenzhen index closed 1.88 percent higher at 10,609.59 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 2.39 percent to close at 2,283.14 points.

The medical equipment, energy and raw material sectors led the gains. More than 2,000 stocks on the two bourses gained, while fewer than 150 stocks fell.

China's consumer prices held steady in March, while producer prices showed signs of ending a run of negative readings, indicating the economy is heading for recovery.

The consumer price index (CPI), a main gauge of inflation, rose 2.3 percent year on year in March, unchanged from February, the National Bureau of Statistics said in a statement on Monday.

It was fractionally below expectations of 2.4 percent by Bloomberg and 2.6 percent by Nomura. The CPI remains below the government's 3-percent target for the year.

The producer price index (PPI), a measure of costs for goods at the factory gate, dropped 4.3 percent year on year in March, narrowing from a 4.9-percent drop in February and 5.3-percent drop in January.

A research note from China International Capital Corp. Ltd. (CICC) stressed increasing evidence of a recovery in investment demand after the Chinese New Year, led by faster growth of infrastructure investment and a recovery in property investment. It predicted PPI will narrow further, and corporate profitability will improve moderately in the next few months. Endi