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Market opens week higher

SHANGHAI'S key stock index ended its losing streak today, closing slightly higher with strong performance in brokerages on speculations that index futures and margin trading will be introduced.

The benchmark Shanghai Composite Index added 0.29 percent, or 9.09 points, to close at 3,122.97 points. Turnover shrank to 90.2 billion yuan (US$13.3 billion) from 116.5 billion yuan last Friday. Gainers outnumbered losers 712 to 154 and 12 stocks remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 1.11 percent to close at 1,140.40 points.

Shang Fulin, chairman of the China Securities Regulatory Commission, has said the regulator will launch index futures and margin trading at an appropriate time. It will also allow more bonds to be traded on the stock exchange.

Haitong Securities Co, the nation's second-biggest brokerage, jumped 3.4 percent to 17.88 yuan. Sinolink Securities Co added 1.6 percent to 23.42 yuan. CITIC Securities Co gained 2.3 percent to 29.18 yuan.

Kweichow Moutai Co and Wuliangye Yibin Co, China's top two producers of premier spirits, led consumer stocks higher on speculation that last week's declines were excessive compared with their earnings.

Moutai climbed 1.5 percent to 167.77 yuan after falling 5.5 percent last week and Wuliangye surged 5.4 percent to 29.25 yuan.

Bucking the upward trend, lenders dropped after the regulatory body said banks may have to raise 500 billion yuan from the stock market next year.

"Banks have to raise up to 500 billion yuan next year in order to boost capital for more lending. And the amount takes into consideration the proposed initial public offering by Agricultural Bank of China," Li Fu'an, director general of the innovation supervision coordination department at China Banking Regulatory Commission, told a forum over the weekend.

China Merchants Bank Co withdrew 2.1 percent to 16.82 yuan while Huaxia Bank Co, partly owned by Deutsche Bank AG, tumbled 3 percent to 11.64 yuan.

Bank of Nanjing lost 1.9 percent to 18.6 yuan after saying it plans to raise as much as 5 billion yuan in a rights offer to replenish capital.


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