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Market slightly higher after morning session

SHANGHAI'S key stock index ended slightly higher in the morning session, as lenders gained after the country's wealth fund promised to raise stakes in the biggest banks.

The benchmark Shanghai Composite Index rose 0.26 percent to 2,919.24 points. Turnover stood at 56.65 billion yuan (US$8.3 billion). Gainers outnumbered losers 482 to 344, with 43 stocks unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 0.47 percent to close at 1,001.97 points.

Industrial & Commercial Bank of China, China Construction Bank Corp and Bank of China led the banks up after state-owned investment company Central Huijin Investment Co has increased its holdings in the banks and said it will continue to buy shares in the open market over the next 12 months.

Industrial & Commercial Bank of China, the nation's biggest listed lender, added 1.8 percent to 5.03 yuan. Construction Bank, the No. 2, climbed 1.6 percent to 5.89 yuan. Bank of China, the third largest, gained 0.8 percent to 4.03 yuan.

Analysts believed the investment unit aimed to shore up the banks, which have been undervalued in this round of correction.

"The securities regulator's estimation that new loans last month may fell between 300 billion to 400 billion yuan has missed market expectation and raised concerns over bank earnings. Huijin's investment could stabilize market sentiment," said Li Shanshan, a China Merchant Securities Co analyst.

Meanwhile, Industrial & Commercial Bank of China will unlocked its 236 billion non-tradable shares held by the finance ministry and Huijin by October 20. Analysts said Huijin's move may blow off the market worry that the two shareholders will reduce holdings and dragged the market down.


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