China™s stocks rose for a second day as official data showing inflation slowing more than forecast spurred speculation the government will further ease monetary policy to boost the world™s second-biggest economy.

Financial and material companies led gains, with Poly Real Estate Group Co. and Inner Mongolian Baotou Steel Union Co. climbing more than 2 percent. The consumer-price index rose 0.8 percent in January, compared with the projection for a 1 percent increase, while the slide in factory gate prices deepened to 4.3 percent, extending a stretch of declines to 35 months.

The Shanghai Composite Index climbed 0.7 percent to 3,116.52 at 10:13 a.m. The data add to concern demand is weakening and put pressure on the central bank to lower borrowing costs to sustain economic growth. Data for January showed imports falling by the most in more than five years, manufacturing gauges signaling a contraction and services expanding at the weakest pace in six months.

The CSI 300 Index rose 1 percent. Hong Kong™s Hang Seng China Enterprises Index added 0.4. The Hang Seng Index lost 0.1 percent. The Shanghai index has gained 51 percent over the past year, the second-best performer among 93 global benchmarks tracked by Bloomberg. It™s valued at 11.6 times 12-month projected earnings, compared with the five-year average multiple of 10.3, according to data compiled by Bloomberg.

Source : Bloomberg