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Economic optimism boosts morning market

SHANGHAI'S key stock index was on an upbeat note on the first trading day after the May Day break and rose over 2 percent in the morning session, on growing expectations that the world economy is on the path to a recovery.

The benchmark Shanghai Composite Index rose 2.28 percent, or 56.51 points, to close at 2,534.08 points.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 2.61 percent to close at 850.62 points.

"Figures have shown signs of an economic recovery and stable performances in the surrounding markets have strengthened market confidence. The index will get technical support between 2,320 and 2,360 points," said Wu Kongyin, an analyst from United Securities Co.

The Purchasing Managers Index, a key indicator of activity in the manufacturing sector, rose for the fifth straight month in April to 53.5, the highest level in more than 10 months, from 52.4 in March. Readings above 50 indicate expansion while whose below signal contraction.

Steel producers led the gains on rising price for major steel products, which triggered expectations on rising profits in the second quarter.

Xinjiang Ba Yi Iron & Steel Co jumped by the 10 percent daily cap to 8.55 yuan. Baoshan Iron & Steel Co, the listed arm of the country's largest steel group, surged 4.15 percent to 6.02 yuan. Handan Iron & Steel Co soared 4.78 percent to 4.38 yuan and Wuhan Iron and Steel Co hiked 5.1 percent to 7.21 yuan.

Coal producers were strong after the nation started closing and merging small coal mines. Analysts said the move would reduce the coal supply and bolster coal prices.

China Shenhua Energy Co advanced 6.15 percent to 26.25 yuan. Pingdingshan Tianan Coal Mining Co climbed 5.34 percent to 26.22 yuan. Datong Coal Industry Co gained 7.99 percent to 30.4 yuan. Yanzhou Coal Mining Co increased 4.08 percent to 14.79 yuan.


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