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Copper leads way as index reaches its highest this year

SHANGHAI shares rose nearly 3 percent yesterday, driving the index to its highest in almost eight months, led by nonferrous metal producers on higher copper prices.

The Shanghai Composite Index rose 2.7 percent to close at 2,444.23 points, the highest since August 20. Turnover further swelled to 155.51 billion yuan (US$22.87 billion) from 106.66 billion yuan on the previous trading day.

The index gained an accumulative 1.01 percent this week, the fourth consecutive weekly gain, despite a mid-week plunge of almost 4 percent on expectation the domestic economy would turn out better in the second quarter.

"Strong performance of United States markets led the local index up and circular shares such as metal producers pushed up the market. Investors are in the hope that demand would pick up in the second quarter and shore up the economy," Orient Securities Co wrote in a research note. "But the index is expected to meet resistance around 2,450 points."

Jiangxi Copper Co, China's biggest producer of the metal, advanced by the 10-percent daily cap to 25.72 yuan after prices of the metal rose to their highest in five months. Copper futures for May delivery added 3.6 percent to US$2.071 a pound in New York. Western Mining Co jumped by 10 percent to 13.85 yuan. Tongling Nonferrous Metals Group Co, China's second-biggest producer, climbed 8.59 percent to 16.06 yuan.

Airlines contributed to the gains after the aviation regulator forecast a full-year profit for the industry. China Southern Airlines Co, the nation' biggest carrier surged by 10-percent daily limit to 5.79 yuan. Air China rose as much as 7.73 percent to 6.69 yuan while China Eastern Airlines Corp gained 6.06 percent to 5.60 yuan.

China Merchants Bank Co rose 1.64 percent to 16.14 yuan after saying last year's profit rose 38 percent, while Shanghai Pudong Development Bank Co inched up 0.86 percent to 22.22 yuan.


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