China stocks extend gains on policy easing hopes

Mainland China share market finished the session sharply higher on Tuesday, 10 February 2015, as risk sentiments boosted up by soft Chinese inflation data which fuelled hopes of an impending interest rate cut by Beijing to boost the world's second-biggest economy. The Shanghai Composite Index climbed 1.5% to 3,141.59 at the close. China's consumer price index (CPI), the main gauge of inflation, grew 0.8% year on year in January, the slowest rise in more than five years, the National Bureau of Statistics (NBS) said on Tuesday. Food prices, which account for nearly one-third of weighting in China's CPI, increased 1.1% year on year. On a monthly basis, consumer prices in January edged up 0.3%. The NBS attributed the tempering growth to retreating food prices due to warmer weather during the period. A bigger comparison base last year, and global oil prices also helped drag down the price levels. Meanwhile, China's producer price index (PPI), which measures wholesale inflation, plunged 4.3% year on year in January, marking the 35th straight month of decline, pointing to continued weak market demand.

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