The producer price index (PPI) rose 10% year-on-year in July, as factory-gate prices – the price of of goods charged by manufacturers excluding transport costs – surged at the fastest pace in 12 years, the South China Morning Post reported. High international energy and commodity prices were blamed for the increase. Sun Mingchun, an economist with Lehman Brothers, said the rising PPI inflation was placing more pressure on profit margins than on consumer price inflation. Mainland stocks fell Monday, with the Shanghai market closing down 5.21%, on investor fears that inflation would threaten company earnings.
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