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Key stock index up on dearer crude oil

SHANGHAI'S key stock index yesterday posted its biggest one-day gain in seven weeks and finished close to 3,300 points after strong performances from oil producers and brokerages.

The Shanghai Composite Index advanced 2.6 percent, or 83.41 points, to close at 3,296.61, the highest since June last year. Turnover was 205.9 billion yuan (US$30.1 billion).

The index broke the 3,300 barrier in the afternoon to hit an intra-day high of 3,301.43, the first time in 13 months.

"Although some of the shares are still undervalued, investors have to be cautious. The index is very likely to be fluctuate between 3,000 and 3,300 points in the near future," Wang Xingjun, a Donghai Securities analyst, wrote in a note.

Oil companies were strong after crude oil rose to near US$65 per barrel at New York Mercantile Exchange on Tuesday. China Petroleum and Chemical Corp, or Sinopec, surged by the daily limit of 10 percent to 13.38 yuan. PetroChina, the country's top oil producer, jumped 5.32 percent to 15.45 yuan.

Other energy producers also gained on expectations improved profits will boost demand.

Datong Coal Industry Co jumped maximum 10 percent to 50.02 yuan. Anhui Hengyuan Coal Industry and Electricity Power Co rose 10 percent to 38.80 yuan. Shanxi Xishan Coal and Electricity Power Co was up 4.91 percent to 39.55 yuan.

Brokerages also lifted the index after the bullish performance of the domestic stocks this year. Changjiang Securities surged 8.46 percent to 25.90 yuan. CITIC Securities jumped 4.82 percent to 34.77 yuan. Haitong Securities added 2.38 percent to 18.90 yuan. Sinolink Securities rose 2.66 percent to 26.97 yuan.

China Minsheng Banking Corp, the nation's first privately owned bank, added 2.6 percent to 8.40 yuan. The company said the China Banking Regulatory Commission approved its plan to sell shares in Hong Kong for the first time.

China Life Insurance gained 2.5 percent to 33.16 yuan after state media reported that its parent company's first-half net profit rose 43 percent to 8.7 billion yuan.


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