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Optimistic local stock market continues its strong revival

SHANGHAI'S key stock index rose for the fourth successive day yesterday, passing the 3,100 barrier amid optimism of a sustainable growth.

The Shanghai Composite Index increased 1.2 percent, or 36.3 points, to close at 3,124.67 points, a 13-month high. The market had its biggest turnover since June 1, 2006, jumping to 203.9 billion yuan (US$30 billion) from 177.4 billion yuan the previous trading day. Gainers outnumbered losers 426 to 423 and 17 remained unchanged.

"The pace of growth of the local benchmark index continued to accelerate, mainly boosted by heavyweights. The market trend has not changed considering the economic situation," said Wu Ling, an analyst from S&E Securities Brokerage Co.

Steel producer led the gainers after Premier Wen Jiabao called for further consolidation in the industry to gain advantages of scale. Baoshan Iron & Steel Co gained 8.36 percent to 7.91 yuan. Wuhan Iron & Steel Co advanced 8.05 percent to 8.59 yuan and Angang Steel Co added 4.25 percent to 14.72 yuan.

Brokerages were strong on speculation the resumption of initial share sales will boost earnings. CITIC Securities Co soared 6.83 percent to 31.61 yuan. Sinolink Securities Co jumped 4.45 percent to 25.33 yuan. Haitong Securities Co increased 4.58 percent to 18.26 yuan. The Pacific Securities Co expanded 2.71 percent to 19.3 yuan.

"The government has warned that bubbles began to emerge in China's assets including stock and the property market. So investors are advised to be cautious about fluctuations in case the bubbles burst," said Wang Suming, an analyst from United Securities Co.

Bucking the upward trend, property developers had mixed performance on fears recent gains had outpaced profit expectations. Shanghai Lujiazui Finance & Trade Zone fell 3.89 percent to 26.18 yuan. Poly Real Estate Group Co dropped 2.39 percent to 29.78 yuan. Gemdale Corp inched down 0.65 percent to 18.29 yuan.


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