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Hope fuels market growth at midday

SHANGHAI'S key stock index rose nearly 2 percent in this morning's session on the back of continued optimism the government's stimulus packages will revive economic growth.

The Shanghai Composite Index added 1.75 percent, or 35.98 points, to 2096.79 points at 11:30am.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 1.12 percent, or 7.15 points, to 646.2 points.

China's banking stocks led the gains after China Securities Journal said that lenders offered a record 1.2 trillion yuan (US$175 billion) of new loans in January in response to the government's stimulus plan to avert an economic slowdown. The new credit would represent a 49 percent increase from a year earlier.

The four biggest state-owned banks completed 20 percent of their full-year targets, with a majority of the loans going to railway, highway, electricity grid and infrastructure, the China Securities Journal reported today.

Industrial & Commercial Bank of China Ltd, the nation's largest, gained 2.41 percent to 3.82 yuan. China Construction Bank Corp., the second-largest, rose 2.21 percent to 4.17 yuan while Bank of China added added 2.26 percent to 3.17 yuan.

China State Shipbuilding Co, the country's biggest shipbuilder, added 0.2 percent to 49.65 yuan after Shanghai Securities News said the government may approve a plan this week to support the industry.

China Eastern Airlines Corp, the nation's third-largest carrier by fleet size, rose 2.07 percent as the new Chairman, Liu Shaoyong, said yesterday the carrier expects a significantly less losses this year, a slight profit next year and more profit in 2011.

Elsewhere, Shanghai Zhenhua Port Machinery Co, the world's biggest maker of container cranes, said it received regulatory approval to issue 3 billion yuan (US$439 million) worth of shares to buy a factory and an office building from its parent. The shares rose 1.47 percent to 9.67 yuan.


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