Nov. 11 (Bloomberg) -- China's property and material stocks rose as a report showed inflation cooled a day after a 4 trillion yuan ($586 billion) government stimulus package triggered the benchmark index's biggest jump in seven weeks.

China Vanke Co. and Poly Real Estate Group Co., the nation's two biggest developers, climbed more than 4 percent on speculation the government has further room to cut borrowing costs after inflation eased to the slowest pace in 17 months. Anhui Conch Cement Co., China's biggest cement maker, advanced 6.6 percent and construction equipment maker Guangxi Liugong Machinery Co. soared by the 10 percent limit for a second day.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, eased 1.8, or 0.1 percent, to 1,799.87 as of 2:29 p.m. local time. It jumped 7.4 percent yesterday, the most since Sept. 19.

``The economic data and economic stimulus plan has brightened the outlook for the market,'' said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing. ``Stocks might have a decent performance next year.''

Vanke climbed 4.1 percent to 6.38 yuan. Poly Real Estate advanced 4.3 percent to 14.71 yuan. Gemdale Corp., a Chinese developer allied with ING Groep NV, rose 2.3 percent to 4.45 yuan.

The government is attempting to revive financial markets after the CSI 300 slumped 66 percent this year, making it Asia's worst-performing benchmark index. House prices in October grew 1.6 percent, the slowest pace in more than three years, the nation's top planning body said today.

Inflation Cools

Consumer prices rose 4 percent in October from a year earlier, the statistics bureau said, after gaining 4.6 percent in September. The slowdown underscores comments by Governor Zhou Xiaochuan on Nov. 9 in Sao Paulo that the central bank may keep lowering borrowing costs after three reductions since September, reducing the cost of financing new homes.

Anhui Conch rose 6.6 percent to 22.10 yuan. Liugong Machinery surged 10 percent to 9.60 yuan. Sany Heavy Industry Co., China's biggest maker of machinery for handling concrete, jumped 8.9 percent to 14.30 yuan. Xugong Science & Technology Co., the publicly traded unit of the nation's biggest maker of construction equipment, gained 8.9 percent to 13.09 yuan.

The four companies all surged 10 percent yesterday on speculation the stimulus package will spur demand for building materials and construction machinery.

Premier Wen Jiabao is confident that China can ward off the financial slump afflicting the world, according to a statement posted on the government's Web site yesterday.

Stimulus Plan

The comments come a day after China announced the stimulus plan to spur expansion in low-rent housing, roads, railways and airports and infrastructure in rural areas, helping sustain global growth as the U.S., Europe and Japan teeter on the brink of recession.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, fell 0.9 percent to 1,858.47. The Shenzhen Composite Index added 0.4 percent to 499.38.

The following companies were among the most active in China's markets. Stock symbols are in brackets after companies' names.

Shanghai International Airport Co. (600009 CH), operator of China's second-busiest airfield, gained 0.17 yuan, or 1.5 percent, to 11.33. The stock was initiated with a ``buy'' rating at Bohai Securities Co.

Shanghai Yuyuan Tourist Mart Co. (600655 CH), a Chinese retailer of gold and jewelry, rose 0.29 yuan, or 3.8 percent, to 7.99. Yuyuan said it plans to buy a 10.9 percent stake in Hong Kong-listed Zhaojin Mining Industry Co. (1818 HK) for 394.3 million yuan.

Shanghai Zhixin Electric Co. (600517 CH), a maker of electric equipment, added 0.63 yuan, or 4.7 percent, to 14.03. The company was initiated with a ``buy'' rating at GF Securities Co.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

Last Updated: November 11, 2008 01:36 EST