Share index at 3-month high

SHANGHAI - Stocks on the Chinese mainland rose on Tuesday, erasing earlier losses and driving the benchmark index to a three-month high, as property developers and automakers climbed.

Beiqi Foton Motor Co led an advance by automakers as crude slid from a 29-month high. Anhui Conch Cement Co dropped from its highest level in three years after Goldman Sachs Group Inc recommended investors to "take profit" in the nation's cement producers.

"Corporate earnings are still growing fast and falling oil prices will help with imported inflation," said Zhang Ling, general manager at Shanghai River Fund Management Co. "Still, fighting inflation is going to be a tough job this year."

The Shanghai Composite Index gained 0.12 percent to 2999.94 at the 3 pm close on Tuesday, the highest since Nov 15 and reversing an earlier 0.7 percent loss. The CSI 300 Index added 0.09 percent to 3337.46.

Poly Real Estate Group Co added 0.99 percent to 13.32 yuan ($2.03). Gemdale Corp gained 1.2 percent to 6.77 yuan.

Beiqi Foton added 3.36 percent to 24.93 yuan, the highest since Dec 23. Dongfeng Automobile Co rose 0.93 percent to 5.42 yuan.

Anhui Conch dropped 1.86 percent to 36.89 yuan. The stock has jumped 27 percent this year as of Monday on speculation the cement maker will benefit from a government plan to build more low-income housing. Huaxin Cement Co slid 2.94 percent to 43.59 yuan. Tangshan Jidong Cement Co fell 1.59 percent to 27.26 yuan.

Goldman Sachs recommended investors to "take profit" on cement producers after the "very strong rally," according to a report by the brokerage.

Yunnan Chihong Zinc & Germanium Co rose 2.02 percent to 31.30 yuan after the company reported its net income rose 75 percent from a year earlier to 461.1 million yuan in 2010.

Bloomberg News

(China Daily 03/09/2011 page16)