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Shanghai shares increase on back of drug makers

SHANGHAI'S key stock index ended higher today, led by pharmaceutical companies after the government said it will improve the health care system.

The Shanghai Composite Index gained 1 percent, or 19.93 points, to 2004.95 points.

Gainers outnumbered losers 644 to 178 and 31 did not change. Turnover shrank to 66.5 billion yuan (US$9.78 billion) from yesterday's 68 billion yuan.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 1.42 percent, or 8.58 points, to 613.16 points.

"Drug makers gained on news of the government's health care reforms and led the index higher at the open. However, investors became cautious after the announcement of macro-economic figures," Hu Yue, an analyst from Jiangnan Securities Co, said.

China's Cabinet said late yesterday that it would invest 850 billion yuan (US$124 billion) over three years to help expand medical care coverage.

Shinva Medical Instrument Co and Beijing Wandong Medical Equipment Co Ltd jumped the 10 percent daily cap to 10.32 yuan and 7.55 yuan respectively

Yunnan Baiyao Group Co, a manufacturer of traditional Chinese medicines, advanced 1.71 percent to 32.77 yuan.

The National Bureau of Statistics of China said today that gross domestic product growth cooled to 9 percent last year, the slowest pace in seven years. Shares fell immediately after the economic figures were disclosed, but market sentiment recovered as it was in line with expectations.

Pingdingshan Tianan Coal Mining Co led a rally among producers of the solid fuel after saying profit for 2008 more than doubled from the year earlier. Pingdingshan Tianan gained 6.83 percent to 18.14 yuan. China Shenhua Energy Co, the nation's biggest coal producer, climbed 4.38 percent to 20.24 yuan. Yanzhou Coal Mining Co, China's fourth-biggest producer, gained 5.37 percent to 10.21 yuan.

China Petroleum & Chemical Corp boosted crude oil production at Shengli field, the nation's second biggest, to a record last year after upgrading the technology used to extract the fuel, parent China Petrochemical Corp said in a newsletter. The shares gained 1.8 percent to 7.91 yuan.

Elsewhere, Shanghai Bashi Industrial Group Co, a bus company, climbed to a four-month high on speculation regulatory approval of an asset restructuring plan will bolster its prospects. Shanghai Bashi jumped the 10 percent daily cap to finish the session at 4.49 yuan.

China Railway Construction Corp rose 0.52 percent to 9.59 yuan after saying a subsidiary won an US$805 million contract to build a railroad in Libya.


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