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Market leaps 6 percent in buoyant mood

SHANGHAI'S key stock index soared over 6 percent today with almost all shares advancing, on signs of early recovery and expectations of extra economic stimulus during the country's annual meeting of its top planners.

The Shanghai Composite Index surged 6.12 percent, or 126.68 points, to 2,126.55 points. It is the biggest gain in almost four months since shares jumped 7.27 percent to end at 1,874.8 points on November 10, 2008.

Among the 889 listed companies in the local bourse, 888 gained and only one lost. Turnover swelled to 127.9 billion yuan (US$18.81 billion), compared with 79.9 billion yuan on the previous trading day.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 6.18 percent, or 41.63 points, to 715.48 points.

"New lending in February is expected to beat market expectations which will lift investor confidence. The Purchasing Manager's Index continued to rise last month, an earlier sign of economic recovery," Guotai Juan'an Securities Co wrote in a research note. The brokerage predicted the index will rebound to between 2,200 and 2,300 points.

The PMI rose to 49 in February from 45.3 in January, the China Federation of Logistics and Purchasing said today. A reading below 50 indicates a contraction.

Output and new orders expanded for the first time in five months.

Meanwhile, Shanghai Securities News reported today new loans last month are expected to reach up to 1 trillion yuan after hitting a record 1.62 trillion yuan in January. It indicates that the 4-trillion yuan stimulus package is taking effect.

"Almost all shares were traded actively and turnover picked up the upward trend, which signals a recovery of market sentiment. Institutional investors poured into the market on increasing expectations of favourable measures to be announced during the annual meeting of CPPCC and NPC," GF Huafu Securities Co wrote in a note.

CPPCC began yesterday and NPC will open tomorrow.

"New stimulus packages are to be unveiled in the near future to reverse the nation's economic slide," said Li Yizhong, Minister of Industry and Information Technology.

Real estate developers advanced as property markets nationwide show signs of recovery with increased transactions.

Gemdale Corp, a Chinese partner of ING Group NV, jumped by the 10 percent daily cap to 8.93 yuan. Poly Real Estate Group Co, China's second-largest developer by market value, climbed 8.92 percent to 19.91 yuan. China Vanke co, the country's largest publicly listed property developer, increased 6.47 percent to 7.9 yuan. Shanghai-based Shimao Property Co hiked 5.3 percent to 8.74 yuan.

Aluminum Corp of China gained 8.96 percent to 9.61 yuan. Jiangxi Copper Co rose by 10 percent to 16.73 yuan after the price of the metal advanced the most in three weeks.


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