原标题：China's stocks rise as economic slowdown may curb further tightening steps
China's stocks rose, trimming a weekly loss, on the prospect the government won't further tighten lending and property curbs given the slowdown in the economy.
Angang Steel Co and Maanshan Iron & Steel Co gained after Citigroup Inc raised its recommendation on the stocks. China Eastern Airlines Corp rallied the most in two years as passenger and cargo growth surged last month.
"The economy is really cooling but expectations are growing there will be countermeasures from the government to stem the drop in growth," said Wei Wei, an analyst at West China Securities Co. "It's a game between investors and the government. The market will be range-bound until there's a clear sign which side will gain the upper hand."
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, added 0.2 percent to 2,581.09 at 9:36 am. It has slid 2.9 percent this week, the most since the five days ended July 2, on evidence of slowing growth and faster inflation at the world's third-largest economy. The CSI 300 Index rose 0.2 percent to 2,821.61, led by material and health-care stocks.
The Shanghai index has advanced 9 percent from this year's low on July 5 as investors speculated the government would ease property curbs and allow more lending to counter slowing growth. That's pared 2010 losses to 21 percent, after the government increased down payment requirements on home sales and ordered banks to set aside more deposits as reserves.
Data released this week indicated import demand slowed more than estimated in July, industrial output rose by the smallest amount in 11 months, retail sales growth eased and new loans climbed less than expected. Inflation accelerated to the fastest pace in 21 months.
The slowdown in China reduces the possibility of further tightening measures while beneficiaries of Chinese growth such as the "commodity complex" are vulnerable in coming months, strategist Christopher Wood said in his Greed & Fear report.
The Standard & Poor's 500 Index dropped 0.5 percent on Thursday, capping its biggest three-day decline since July 1, after an unexpected rise in unemployment claims.
Central bank adviser Xia Bin said China should maintain the continuity of policies in the second half of this year from the first half, the People's Daily reported on Friday. Increasing domestic consumption will be the key to ensuring stable economic growth in the future, while the nation's economic situation will be more complex next year than it was this year, he said.
A gauge of material producers rose 0.9 percent for the second-biggest gain after health-care stocks. Angang gained 0.5 percent to 8.24 yuan after it was upgraded to "hold" from "sell" by Citigroup analysts led by Scarlett Chen, who citing improving leading indicators. Maanshan Iron & Steel Co. rose 0.3 percent to 3.45 yuan after being upgraded to "buy" from "sell."
China Eastern rose 3.3 percent to 7.79 yuan. The airline reported 56 percent growth in total passengers last month, including an 80 percent jump in international travelers.
A Chinese property industry group called on the government to refrain from tightening real-estate curbs further after measures including higher mortgage rates and lending restrictions led to a slump in transactions.
"In our reports to related government agencies of the State Council in July, we have, on several occasions, suggested that new tightening measures should be postponed in order to stabilize market expectations," Zhu Zhongyi, vice chairman of the China Real Estate Association, told a forum on Thursday.
Shanghai's new mortgage loans plunged 98 percent from a year earlier to 270 million yuan in July, the lowest in at least a year, the Shanghai branch of the central bank said in an e-mailed statement on Thursday. The amount was 91 percent lower than the previous month.
End of Rebound
The recent rebound in China's stocks may be coming to an end because of growing inflation expectations and less likelihood the government will relax policy tightening measures, according to Guotai Junan Securities Co.
The tightening policies will continue to weigh on big-capitalization stocks while smaller companies will face press from high valuations and an increasing supply of stocks that will become tradable, wrote analyst Wang Cheng in a report on Friday.