China stocks rise on economic revival hopes

Chinese shares rose for a third day Tuesday as investors saw higher wholesale prices as a sign the economy might be nearing the bottom of its slump.

The benchmark Shanghai Composite Index jumped 1.8 percent, or 40.45 points, to close at 2265.16. The Shenzhen Composite Index for China's smaller second exchange rose 2.6 percent to 714.67.

Investors were encouraged that government data released Tuesday showed wholesale prices rising in January compared with December, which suggested demand was rising, said Chen Huiqin, an analyst for Huatai Securities in the eastern city of Nanjing. That was even though the data showed wholesale prices fell by 3.3 percent in January from a year earlier.

"Expectations that the economy is warming are there, so investors are very excited," Chen said.

Nonferrous metals extended gains as a backlog of inventory shrank, possibly due to stronger demand fueled by a government economic stimulus package that includes higher spending on construction.

Jiangxi Copper Ltd., the country's second-biggest metal producer, soared by the daily limit of 10 percent for the third day to 18.41 yuan. Yunnan Tin Co. increased 6.3 percent to 17.03 yuan.

Real estate stocks rose after news reports the government is seeking to aid the industry. China Vanke Ltd., the country's biggest developer, added 3 percent to 8.14 yuan, and COFCO Property (Group) Co. climbed 4.3 percent to 6.5 yuan.

Tourism-related shares rose as travel-related companies reported higher-than-expected revenues from the recent Lunar New Year holidays.

Shanghai Jin Jiang International Industrial Investment Co., a leading hotel operator, and Beijing Capital Tourism Ltd. both soared by 10 percent. Jin Jiang ended at 11.67 yuan, while Capital Tourism closed at 17.47 yuan.

In currency markets, China's yuan strengthened to 6.8323 to the U.S. dollar, up from Monday's close of 6.83791.