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Key index ends the week on a high note

SHANGHAI'S key stock index ended higher yesterday, sending the index to a weekly gain of 2.6 percent, on speculation that the government will strengthen efforts to prop up the country's ailing industries.

The Shanghai Composite Index added 1.78 percent, or 34.23 points, to close at 1,954.44 points.

Gainers outnumbered losers 524 to 292 and 60 remained unchanged. Turnover swelled for a fourth consecutive day to 100 billion yuan (US$14.71 billion), up from 83.2 billion yuan the previous day.

Premier Wen Jiabao has pledged to expand a 4-trillion-yuan stimulus package which was first unveiled in November.

Machinery makers advanced on news reports of an upcoming machinery industry stimulus package designed to speed up mergers and acquisitions and encourage technology innovation.

Guangxi Liugong Machinery Co advanced 1.57 percent to 11.66 yuan while Sany Heavy Industry Co rose 1.32 percent to 18.47 yuan.

China Investment Corp, the nation's US$200-billion sovereign wealth fund, has been increasing its holdings in the nation's three largest banks.

China Construction Bank Corp surged 4.05 percent to 3.85 yuan. The Industrial and Commercial Bank of China Ltd climbed 2.01 percent to 3.56 yuan while Bank of China Ltd edged up 1.69 percent to close at 3 yuan.

Brokerages rose after Shang Fulin, chairman of the China Securities Regulatory Commission, said that the securities watchdog would allow margin trading and short-sales on a trial basis. Haitong Securities jumped 7.17 percent to 10.91 yuan. Citic Securities, the country's biggest by market value, gained 4.05 percent to 20.57 yuan.

"The trend of the local index is a tug-of-war between falling corporate earnings and government boosting plans," TX Investment Consulting Co wrote in a research note.

"From a short-term perspective, some economic indicators have shown signs of recovery with support policies rolling out,"


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