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Key index beats 3,400 level

SHANGHAI'S key stock index breached the 3,400 barrier and closed at a 14-month high yesterday on abundant liquidity in the market as a result of the central government's easy monetary policy.

The Shanghai Composite Index gained 1.86 percent, or 62.61 points, to close at 3,435.21 points. Turnover rose slightly to 240.6 billion (US$35.38 billion) from 223.6 billion yuan last Friday.

"The market opened higher in the wake of rallies in surrounding markets," said Wen Lijun, an analyst at Nanjing Securities Co. "The rising turnover reflected abundant liquidity under the monetary policy despite the accelerating pace of initial public offerings."

Wen added that the "barometer still has the momentum to move upward with turnover at a relatively high level."

Toll road operator Sichuan Expressway more than tripled from its IPO price in its market debut yesterday, twice triggering a brief trade suspension in the shares.

The company soared 202.78 percent to end at 10.90 yuan, China's biggest debut rally since March 2008.

Sichuan Expressway was Shanghai's first IPO since the regulator allowed the resumption of new share sales last month.

China State Construction Engineering Corp will start trading in Shanghai tomorrow after raising 50 billion yuan in the world's biggest IPO in 16 months.

Metal producers led gains on speculation the government stimulus spending will continue to boost demand for metals. Aluminum Corp of China Ltd surged 8.05 percent to 19.33 yuan. Yunnan Copper, the country's third-biggest smelter of the metal, climbed by the 10 percent daily cap to 34.87 yuan. Jiangxi Copper Co gained 5.73 percent to 49.05 yuan.

Baoshan Iron & Steel Co, the nation's biggest steel maker, added 5.49 percent to 8.65 yuan, Anyang Iron & Steel Inc jumped 9.23 percent to 6.39 yuan and Wuhan Iron and Steel Co rose 6.32 percent to 10.6 yuan.

Brokerages were also strong on news that the securities regulator has approved Everbright Securities' IPO. CITIC Securities Co gained 4.84 percent to 36.38 yuan while Haitong Securities Co added 2.8 percent to end at 19.11 yuan.


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