SHANGHAI stocks edged up today as paper manufacturers gained on yuan's recent gains against the dollar, offsetting the decline of cement producers due to poor earnings.

The benchmark Shanghai Composite Index added 0.17 percent to settle at 2,197.60 yuan, with a daily turnover of 61.9 yuan (US$10 billion).

"The key index is expected to fluctuate in a certain range as investors are getting neutral over economic recovery, policy and liquidity," analysts with Citic Securities said in a report today.

The report said that the central government has shifted policy emphasis to tame market risks after Premier Li Keqiang said in a State Council meeting yesterday that China will strive to effectively control risks in local government debt, which may weigh on the market.

But the government is expected to introduce stimulus measures to boost domestic demand and stabilize growth in an effort to offset the downward impact resulting from risk-control policies, according to the report.

Paper producers led the market up on speculation yuan appreciation will help them to reduce cost of importing raw materials, analysts said. Fujian Nanzhi Co Ltd increased 3.8 percent to 4.97 yuan. Yanbian Shixian Bailu Papermaking Co climbed 3.3 percent to 5.95 yuan.

Cement producers fell the most as data from Ccement.com showed the gross profit of 15 listed cement producers slumped 45 percent from a year earlier to 11.6 billion yuan (US$1.9 billion) in 2012.

Fujian Cement Inc decreased 1 percent to 7.81 yuan. Gansu Qilianshan Cement Group Co fell 1.6 percent to 11.40 yuan.