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Market bounces back from seven-week low

SHANGHAI'S key stock index rebounded from a seven-week low today on speculation that previous losses were excessive.

The benchmark Shanghai Composite Index added 0.76 percent, or 23.26 points, to close at 3,073.78 points. Turnover shrank to 90.9 billion yuan (US$13.4 billion) from 99.5 billion yuan on Tuesday. Gainers outnumbered losers 777 to 95 and 9 stocks remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 1.67 percent to close at 1,127.95 points.

"This round of correction was brought by an expectation of capital shortage due to the oversupply of shares. And previous drops seem to have digested most of the negative impact," Everbright Securities Co wrote in a research note.

Telecommunications led the gainers after the industry regulator said investment on 3G infrastructure and services is expected to reach 143.5 billion yuan while the number of 3G users likely to surpass 10 million by the end of this year.

Eastern Communication Co surged 4 percent to 6.04 yuan. Founder Technology Group advanced 3.2 percent to 4.85 yuan. Shanghai Belling Co soared 4 percent to 7.21 yuan.

Metal producers were strong on speculation that demand for raw materials will be sustained. Jiangxi Copper Co was up 1.2 percent to 36.31 yuan after tumbling to a two-month low yesterday. Aluminum Corp of China gained 1.3 percent to 13.65 yuan.

Bucking the upward trend, gold producers fell after the bullion price lost ground. Zijin Mining Group Co, the country's largest gold producer, dipped 0.1 percent to 9.22 yuan. Zhongjin Gold Corp, the second biggest by market value, slid 1 percent to 54.94 yuan. Shandong Gold Mining Co retreated 1.2 percent to 74.43 yuan.


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