SHANGHAI stocks inched up this morning as small-cap firms advanced following a surge of their peers on China's Nasdaq-style bourse in Shenzhen.

The Shanghai Composite Index added 4.31 points, or 0.21 percent, to 2,027.71. Turnover was 41 billion yuan (US$6.7 billion) by the noon break.

"Consumer staples such as pharmaceutical and electronic shares and shares of emerging industries are expected to benefit from China's economic restructuring, although the overall market performance is depressed by China's economy, which is likely to slow down further in the second half of the year," Tebon Securities Co said in a note today.

IT firms, media companies and medical device producers were among the biggest gainers as the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, surged 1.65 percent in the morning session.

Chengdu Dr Peng Telecom & Media Group Co advanced 2.2 percent to 13.75 yuan. Fiberhome Telecommunication Technologies Co jumped 3.1 percent to 20.54 yuan.

Chinese Premier Li Keqiang yesterday said China's is capable of achieving its growth target of 7.5 percent this year without a massive stimulus package.

The market gain was narrowed by the decline of most heavyweights including distillers, homebuilders and non-ferrous metal producers.