China Speculation Leads Shanghai Higher

Tokyo, Japan (AHN) - Shanghai and Hong Kong markets rose Wednesday as investors considered talk China's government may institute an economic stimulus package, including tax cuts.

The Shanghai Composite rose 7.6 percent to close at 2,523 while Hong Kong's Hang Seng China Enterprises increased 4.3 percent to finish at 11,179.

Sparking the upswing were comments by Chinese Vice-Premier Li Keqiang that the government saw that something was needed to boost China's economy. A JP Morgan analyst also said China was mulling an economic package worth between $29 billion and $58 billion.

Real estate and building-related stocks shot higher on the speculation. Chinese real estate giant China Vanke Co., rose 8.4 percent while China National Building Material Co. skyrocketed 19.8 percent on the Hong Kong market.

In Tokyo, the Nikkei 225 Average finished slightly lower, falling 0.1 percent to 12,851. The market recovered from a one-day low of 12,753.

In related news, automaker Toyota announced Wednesday it will raise prices on the hybrid Prius and various commercial cars by 3 percent after seeing the cost of steel and other commodities jump by 30 percent.

In other markets, Sydney gained 1.3 percent to 4,929 on news of higher crude oil prices while New Zealand and Taiwan increased 0.9 percent.