China Stocks Rise, Led by Gemdale, Developers on Inflation

By Zhang Shidong

Feb. 10 (Bloomberg) -- China’s stocks rose for a third day, led by developers, as inflation cooled to the weakest pace in more than two years, fanning speculation that the central bank may lower interest rates.

Gemdale Corp., a Shanghai-based developer, added 3.1 percent after inflation slowed and a newspaper said the government is seeking to aid the industry. China Cosco Holdings Co., the country’s largest container line, jumped by the 10 percent daily limit for a second day after the Baltic Dry Index, a measure of shipping costs for commodities, rose for a 15th consecutive day.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 40.45, or 1.8 percent, to 2,265.16 at the close, the highest since Sept. 26. The CSI 300 Index, which tracks exchanges in Shanghai and Shenzhen, gained 1.3 percent to 2,326.75.

“The slowing consumer price index has left the central bank with more room for cutting interest rates, and that will help rate-sensitive stocks,” said Wu Kan, a fund manager in Shanghai at Dazhong Insurance Co., which manages the equivalent of about $285 million.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net