China shares extend rally despite unfavorable data

BEIJING - Although a raft of data releases showed that the country's economy is still faltering, China's stocks continued to rally on Monday.

The benchmark Shanghai Composite Index rose 7.13 points, or 0.34 percent, to close at 2,134.89.

The Shenzhen Component Index rose 60.47 points, or 0.69 percent, to close at 8,769.54.

Combined turnover shrank to 182.65 billion yuan ($28.82 billion) from the previous trading day.

Gainers outnumbered losers by 654 to 262 in Shanghai and by 1,074 to 382 in Shenzhen.

Data from the National Bureau of Statistics showed that inflation rebounded slightly in China in August due to higher food prices, making it harder for authorities to balance inflation control and monetary easing in a slowing economy.

China's consumer price index (CPI), a key gauge of inflation, rose 2 percent year on year in August, accelerating from 1.8 percent in July, the bureau said.

Industrial production and investment continued to falter in China, dimming hopes for a robust recovery in the world's second-largest economy this year, according to the bureau.

However, investor sentiment remained positive, as investors expect more favorable policies from the government after China's top economic planner approved 55 investment projects worth 1 trillion yuan to build highways, ports and railways across the country.

Cement producers led the gains, with the sector's sub-index surging 4.63 percent from the previous close.

Anhui Conch Cement Company, a leading cement maker in China, rose 2.59 percent to 15.46 yuan per share, while Guangdong Tapai Group surged 8.88 percent to 8.71 yuan.

China's largest oil refiner Sinopec rose 0.65 percent to 6.22 yuan.  China Vanke Co., the country's largest property developer, rose 0.12 percent to 8.61 yuan.