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September 12, 2009

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Home » Business » Finance

Key index rises 2% on economic data

SHANGHAI'S key stock index rose more than 2 percent yesterday as industrial production, lending, investment and retail sales in China surged.

The Shanghai Composite Index added 2.22 percent to end the week at 2,989.79, sending the barometer to a 4.5 percent weekly gain -- the biggest in seven weeks. Turnover rose to 137.9 billion yuan (US$20.28 billion) from 116.9 billion yuan.

The People's Bank of China, the central bank, reported yesterday bank lending rose to 410.4 billion yuan in August from 355.9 billion yuan in July and from 271.54 billion yuan a year ago.

"New yuan lending last month beat analysts' expectations of 300 billion yuan, easing investor concerns over capital shortages in the market," said Wen Lijun, an analyst at Nanjing Securities Co.

Bolstered by strong loan figures, lenders led the rally. Shanghai Pudong Development Bank surged by the 10 percent daily cap to 20.28 yuan and China Merchants Bank Co advanced 4.6 percent to 15.82 yuan.

Industrial output gained 12.3 percent last month from a year earlier, after climbing 10.8 percent in July. Urban fixed-asset investment in the first eight months jumped 33 percent, the National Bureau of Statistics said.

"The data were in line with investor expectations for a sustainable economic recovery," said Wen.

Shares have performed strongly, rising 10.44 percent so far this month, on signs that the Chinese government's efforts to boost the market after the index tumbled about 16 percent in August are working.


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