Stocks rebound after PPI drop

Shanghai stocks rebounded in Tuesday's afternoon session and closed up 0.1 percent after the producer price index dropped 1.4 percent year on year in November.

The Shanghai Composite Index edged up 2.84 points to 2,917.32 and turnover picked up slightly to 180.6 billion yuan (US$25.8 billion).

Most blue chips are under pressure amid concerns that inflation is at a relatively high level following rises in food prices, while shares in the growth enterprise market reversed the downward trend among expectations that new technology launches would boost the profitability of technology startups.

Financial shares dragged down the index. China Merchants Bank went down 0.41 percent to 36.12 yuan while China Construction Bank shed 0.28 percent to 7.07 yuan.

The Postal Savings Bank of China posted a 2 percent increase on its debut on the Shanghai bourse after raising US$4 billion in its initial public offering. 

The ChiNext Composite Index advanced 0.75 percent.

Medical device companies were also strong. Lepu Medical Technology (Beijing) Co Ltd jumped 5.88 percent to 32.77 yuan and Guangdong Transtek Medical Electronics Co surged to the daily limit of 10 percent. Shenzhen Glory Medical Co advanced 1.38 percent to 4.41 yuan.

Eseence Securities said investors should wait and see how the market performs till early next year and to pay more attention to consumer goods companies and high-tech shares which are expected to outperform the market.