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Market takes off with economic optimism

SHANGHAI'S key stock index climbed more than 2 percent in morning trade to an eight-month high as new loans in March surged and statistics suggested a possible recovery for the economy.

The benchmark Shanghai Composite Index jumped 2.31 percent, or 56.58 points, to close at 2,500.80 points. Turnover was 102.9 billion yuan (US$15.0 billion). Gainers outnumbered 576 to 261 and 71 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, added 1.54 percent to close at 833.45 points.

New yuan loans surged to a record 1.89 trillion yuan in March, as banks continued the expansion in credit with the support of the government's effort to boost the economy, the People's Bank of China said on Saturday. M2, the broadest measure of money supply, grew 25.5 percent, up from up from the 20.5 percent in February.

Bank of China edged up 0.86 percent to 3.53 yuan. China Construction Bank, the second-largest bank, added 1.11 percent to 4.57 yuan. Bank of Communications rose 1.16 percent to 6.95 yuan. Industrial & Commercial Bank of China, the nation's biggest lender, rose 1.23 percent to 4.12 yuan.

Premier Wen Jiabao told reporters in Thailand that China's economy showed signs of a better-than-expected recovery in the first quarter, as investment in fixed assets and consumer demand rose, Xinhua News Agency reported yesterday.

Financial shares were also strong. China Life Insurance Co Ltd, the country's largest life insurance company, advanced 3.28 percent to 25.20 yuan. China Pacific Insurance (Group) Co, the nation's third-largest insurer, hiked 5.50 percent to 19.17 yuan.

China Shenhua Energy Co, the nation's largest coal
producer, surged 9.47 percent to 24.97 yuan on speculation coal prices would rise. Datong Coal Industry Co Ltd jumped 5.71 percent to 24.63 yuan. China Coal Energy Co Ltd advanced 5 percent to 11.13 yuan.

Real estate developers were also among the gainers. China Vanke Co, the nation's largest listed property developer, rose 2.26 percent to 8.58 yuan. Gemdale Corporation lifted 0.89 percent to 11.35 yuan. China Merchants Property Development Co Ltd added 1.66 percent to 22.60 yuan.


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