SHANGHAI - Most stocks on the Chinese mainland rose, sending the benchmark index to a sixth day of gains, on speculation that Europe's debt crisis is easing and Chinese inflation is peaking, reducing the need for further increases in interest rates.

Anhui Conch Cement Co advanced 1.8 percent, leading gains for building-material makers, after the government said it will support bond sales to fund affordable-housing construction. Yunnan Copper Industry Co, China's fourth-biggest producer of the metal, rose to a one-month high after copper prices rebounded.

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"Current share prices have fully priced in the deterioration in earnings and a slowing economy," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "The easing European debt issue and possible relaxation of tightening policies will support a decent rally. We have lots of good news here."

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, added 0.97 points to reach 2759.20 at its close; 440 stocks rose and 417 declined. The six-day rally, helped by Premier Wen Jiabao's commentary in the Financial Times newspaper on June 24 that measures to cool inflation are working, is the longest since the period ended Feb 17. The CSI 300 Index advanced 0.2 percent to 3041.73.

The Shanghai gauge is valued at 12.8 times estimated earnings, compared with the average of 18.9 times over the past five years, according to data compiled by Bloomberg. The index has slumped 5.8 percent this quarter on concern government measures to cool inflation will slow the economy. The central bank has raised reserve requirements 12 times and rates four times since the start of last year. The government has less room to tighten monetary policy as inflation may peak in June or July, the China Securities Journal wrote in a front-page editorial on Tuesday.

The room to raise the reserve requirement for banks is relatively small, according to the report. Interest-rate increases and the yuan's exchange rate should be used "flexibly" and should depend on economic conditions, the newspaper said. The importance of using fiscal policy may be urged, it said.

China International Capital Corp, China's largest investment bank, forecasts peak inflation of about 6 percent in June. The CPI rose to 5.5 percent last month, the highest level since July 2008.

China will refrain from raising interest rates again in 2011 as a credit crunch cools the economy, according to ING Groep NV.

The spread between the one-year deposit rate and the two-year interest-rate swap narrowed to 20 basis points on Monday from 94 basis points on Nov. 26, signaling there will be no more than two rate increases in the coming year.

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