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Key index jumps on hopes for economy

SHANGHAI'S key stock index jumped 1.56 percent to an 11-month high yesterday, extending its climb for a fourth straight day after the State Council and the World Bank showed optimism over the Chinese economy.

The Shanghai Composite Index, which tracks the yuan-denominated A shares and hard currency B shares, rose 43.78 points to 2,853.9 yesterday, its highest close since July 28. The index touched an intraday high of 2,855.42 and an intraday low of 2,810.85.

Trading totaled 149.7 billion yuan (US$21.9 billion), versus 117.9 billion yuan a day earlier.

The Shenzhen Composite Index, which tracks the smaller bourse on the Chinese mainland, added 0.84 percent to 940.85.

"The market is full of optimism after the State Council and the World Bank confirmed China's economy is on the road to recovery," said Zhang Qi, an analyst at Haitong Securities Co.

"The index may soon surpass 3,000 points given the stronger confidence among investors," he said.

The State Council, China's Cabinet, on Wednesday said the country's economy is at a critical moment as it begins to recover steadily.

The World Bank yesterday upgraded the forecast for China's economic growth this year to 7.2 percent from 6.5 percent in a previous forecast in March.

The Ministry of Finance yesterday said it was possible the individual tax threshold may be raised again, which also gave the market a boost.

Shares of medicine makers and banks led the gainers.

Henan Taloph Pharmaceutical Stock Co and Beijing Tiantan Biological Products Co climbed by the daily limit of 10 percent to 8.64 yuan and 23.87 yuan respectively. Shanghai Jiaoda Onlly Co jumped 9.68 percent to 10.88 yuan.

China Construction Bank rose 5.2 percent to 5.87 yuan, and the Industrial Bank Co increased 4.05 percent to 33.65 yuan. The Industrial and Commercial Bank of China, the nation's biggest lender, added 2.63 percent to 5.07 yuan.


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