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Report's optimism gives market a boost

SHANGHAI'S key stock index rose for a third day to close above 2,400 points after a brokerage's report said the index would rebound along with the recovery of the economy.

The benchmark Shanghai Composite Index was up 0.72 percent, or 17.27 points, to close at 2,425.29 points. Turnover was 172.5 billion yuan (US$25.2 billion). Losers outnumbered gainers 516 to 342 and 50 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, edged up 0.80 percent to close at 805.12 points.

China's stocks will benefit from a "V-shaped" recovery in the world's third-largest economy, Citic Securities said. The research report, by the country's biggest listed brokerage, predicted an increase in corporate profits in the second quarter, boosted by the government's stimulus packages. It said brokerages, banks and insurance companies would outperform the market.

Ping An Insurance, China's second-biggest insurer, advanced 3.20 percent to 40.02 yuan. China Life Insurance Co Ltd, the country's largest life insurance company was up 2.81 percent to 23.76 yuan.

Industrial & Commercial Bank of China, the nation's biggest lender, edged up 0.50 percent to 3.99 yuan. Bank of Communications advanced 2.00 percent to 6.62 yuan. China Merchants Bank Co rose 1.98 percent to 16.51 yuan. China Construction Bank edged up 1.62 percent to 4.39 yuan.

"The index will continue to rise as there is enough liquidity in the market and we're confident blue chips will remain strong in the future," said a research note by Nanjing Securities.

Energy companies and coal producers were strong in the second half of trading. Datong Coal Industry Co Ltd surged the daily limit of 10 percent to 20.49 yuan. Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd advanced 4.28 percent to 8.78 yuan. Jinan Iron and Steel Co Ltd rose 4.06 percent to 7.69 yuan. Wuhan Steel Processing Co Ltd hiked 5.70 percent to 8.16 yuan.

Real estate developers were also strong. China Vanke Co, the nation's biggest listed property developer, added 1.65 percent to 8.62 yuan. Gemdale Corporation was up 1.34 percent to 11.34 yuan. Poly Real Estate Group Co Ltd rose 2.05 percent to 22.94 yuan.


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