fluctuate in china stocks

China stocks fluctuated. Fosun Shanghai Pharmaceutical Group Co. led gains by the populations health and consumer staples, on speculation the weather industries monetary tightening, while producers of raw materials fell as metals retreated.

Shanghai Fosun Pharmaceutical rose 3.1 percent and Yunnan Baiyao Group Co., a manufacturer of traditional Chinese medicine, increased 2.4 percent. Jiangxi Copper Co., the largest producer of the metal, fell 1.5 percent after copper prices fell.

"Earnings of healthcare companies are stable, regardless of price controls or a recession," said Li Ying, an analyst at Capital Securities Corp. in Shanghai. "Nothing could hurt demand for drugs."

The Shanghai Composite Index, which remains the largest stock exchanges in China, was little changed at 2,871.44 as of 14:22 CSI 300 Index advanced 0.1 percent to 3,198.17.

Shanghai Fosun Pharmaceutical rose 3.1 percent to 15.18 yuan, fixed for the highest close since Nov. 10. Yunnan Baiyao Group Co., a manufacturer of traditional Chinese medicine, increased 2.4 percent to 67.37 yuan.

High Inflation

China's inflation may reach 5 percent next year, BOC International in a report released today. The government will continue to tighten monetary policy to counter high inflation, the report said.

Jiangxi Copper, the largest producer of the metal, fell 1.5 percent to 34.45 yuan. Copper extended losses as tensions on the peninsula of Korea reduced the appeal of riskier assets and concerns about monetary tightening policies in China damped the outlook for demand for metals. The metal for delivery in three months fell to 0.8 percent to $ 8,175 a ton on the London Metal Exchange.

Gauges of materials and energy producers in the CSI 300 index posted the biggest drop among 10 industry groups.

"Investors remain cautious on speculation tighter policies including interest rate hikes," said Wu Kan, a fund manager based in Shanghai at Dazhong Insurance Co., which oversees $ 285 million. "The fluctuations will continue the downward pressure."

Monetary tightening

The Shanghai index has fallen 9.1 percent since reaching a peak almost seven months, on November 8 on concern that monetary tightening will affect economic growth accelerated. The central bank has ordered lenders to set aside large reserves of twice in two weeks after interest rates rose in October, the first increase since 2007.

The MSCI Asia Pacific Index rose 0.5 percent, the biggest gain in a week after European governments sought to quell turmoil in the markets by agreeing to Ireland tied debt of 85 million euros (113 million dollars) aid package and water down proposals to force bondholders to cover part of the bailouts in the future.

Anhui Gujing Distillery Co. rose 9.3 percent to 50.91 yuan, fixed for the highest close since at least June 1996. The company plans to increase to 1.3 billion yuan from a private placement of up to 20 million shares, according to a statement from the Chinese liquor maker in Shenzhen stock exchange.

Kweichow Moutai Co., the largest Chinese producer of liquor baijiu by market value, gained 5.5 percent to 218.61 yuan, set for its highest close since March 2008.