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Shanghai stocks make third straight gain

SHANGHAI'S key stock index continued its rise for a third consecutive day after the Chinese New Year holiday on the back of continued optimism the government's stimulus packages will revive economic growth.

The Shanghai Composite Index added 2.28 percent, or 46.94 points, to 2107.75 points.

Winners outnumbered losers 762 to 98 while 24 stocks remained unchanged. Turnover continued to grow, to 110.7 billion yuan (US$16.28 billion) from yesterday's 96.7 billion yuan.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 2.18 percent, or 13.94 points, to 652.99 points.

"Local benchmark index has been outperforming surrounding markets since last November when plans to revive the country's 10 key sectors were revealed. Industries that receive strong support from the government have been actively traded," Haitong Securities Co wrote in a research note.

China's banking stocks led the gains after media reports that new loans in January marked a record high of 1.2 trillion yuan (US$175 billion), up 49 percent from a year earlier, as a result of the government's stimulus package to battle the economic slowdown.

The four biggest state-owned banks completed 20 percent of their full-year targets, with a majority of the loans going to railway, highway, electricity grid and infrastructure, the China Securities Journal reported today.

The Industrial & Commercial Bank of China Ltd, the nation's largest, gained 2.95 percent to 3.84 yuan. The China Construction Bank Co, the second-largest, rose 2.7 percent to 4.19 yuan while the Bank of China added 1.94 percent to 3.16 yuan.

The China State Shipbuilding Co, the country's biggest shipbuilder, inched up 0.26 percent to 49.68 yuan after Shanghai Securities News said the government may approve a plan this week to bolster the industry.

China Eastern Airlines Co, the nation's third-largest carrier by fleet size, surged 3.11 percent as the new Chairman, Liu Shaoyong, said yesterday the carrier expects a significantly less losses this year, a slight profit next year and more profit in 2011.

Elsewhere, the Shanghai Zhenhua Port Machinery Co, the world's biggest maker of container cranes, said it received regulatory approval to issue 3 billion yuan (US$439 million) worth of shares to buy a factory and an office building from its parent. The shares rose 1.89 percent to 9.71 yuan.


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