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Shanghai index opens month with 1.48% gain

SHANGHAI'S key stock index closed higher on the first trading day this month as investors approved of comments that the government's relatively loose monetary policy will continue.

The benchmark Shanghai Composite Index rose 1.48 percent, or 50.53 points, to close at 3,462.59 points. Turnover was 236.3 billion yuan (US$34.6 billion). Gainers outnumbered losers 712 to 149 and 47 remained unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic market, added 2.02 percent to close at 1,140.54 points.

Vice Premier Li Keqiang said in a statement that the Chinese economy is heading towards recovery and has reached a critical stage. The country will continue its positive fiscal policy and relatively loose monetary policy this year and pledge to implement economic stimulus measures.

The Purchasing Managers' Index (PMI) of China's manufacturing sector stood at 53.3 percent in July, the China Federation of Logistics and Purchasing said on Friday. The figure was 0.1 percentage points above that of June and continued above 50.0, which suggested expansion of the economy.

China Petroleum & Chemical Corp, Asia's largest refiner and also known as Sinopec, jumped 4.45 percent to 15.03 yuan. PetroChina, the largest oil producer and biggest component on the market, rose 1.59 percent to 15.98 yuan. Huadian Power International Co Ltd surged 6.73 percent to 6.66 yuan.

Baoshan Iron and Steel Co, China's biggest steel maker, advanced 4.88 percent to 10.10 yuan. Angang Steel Co Ltd surged 8.93 percent to 18.90 yuan. Xinjiang Bayi Iron & Steel Co Ltd rallied 9.48 percent to 14.90 yuan. China made 266.58 million tons of crude steel in the first half of the year and the daily output was about 1.65 million tons in June.

Resource companies were strong. Aluminum Corporation of China Ltd edged up 0.56 percent to 19.75 yuan. Jiangxi Copper Co rose 1.06 percent to 48.55 yuan. Shandong Gold Mining Co added 1.20 percent to 61.74 yuan.

Banks were down on the day as a cut in new loans in the second half of the year may hurt profits. Industrial & Commercial Bank of China, the nation's biggest lender, dipped 0.55 percent to 5.40 yuan. Shanghai Pudong Development Bank was down 0.26 percent to 27.10 yuan. China Construction Bank lost 0.91 percent to close at 6.54 yuan. Bank of Communications retreated 1.26 percent to close at 10.96 yuan.

Property developers were among the losers as Xinhua news agency cited an unnamed official as saying the central bank would fine-tune its moderately loose monetary policy, which will reduce mortgage loans. China Vanke Co, the biggest listed domestic real estate developer, dipped 0.90 percent to 13.24 yuan. Gemdale Corporation dropped 2.88 percent to 17.17 yuan. Poly Real Estate Group retreated 1.98 percent to close at 26.78 yuan.


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