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Stimulus package sparks rise in HK

Hong Kong stocks rose for the first time in three days yesterday.

Aluminum Corp of China, the nation's largest producer of the metal, advanced 7.3 percent after reports that the government had started investing the second allocation of a stimulus package.

China Construction Bank gained 4.5 percent after reports of a record 1.2 trillion yuan (US$175 billion) in new loans in January. Cosco Pacific surged 12 percent after commodity cargo rates climbed for an 11th day.

"The stimulus plan is the main momentum driving the market up," said Castor Pang, a strategist at Sun Hung Kai Securities in Hong Kong.

"Investors are not convinced that the worst of the economy is over.

"This rebound won't last very long," he added.

The Hang Seng Index added 287.00, or 2.3 percent, to close at 13,063.89, halting a two-day, 3.8 percent drop.

The benchmark measure has retreated 9.2 percent this year, extending last year's 48 percent slump, which was the biggest annual decline since 1974, Bloomberg News said.

The Hang Seng Index is valued at 10 times estimated earnings, down from 18.7 times at the beginning of last year.

The Hang Seng China Enterprises Index, which tracks Chinese companies' H shares, advanced 4.1 percent to 7,241.72.

Aluminum Corp, known as Chalco, advanced 7.3 percent to HK$3.70, the second-largest percentage gainer on the Hang Seng Index.

China Shenhua Energy Co, the country's biggest coal producer, climbed 4.1 percent to HK$17.40.

China Construction Bank climbed 4.5 percent to HK$3.94. Industrial & Commercial Bank of China gained 1.8 percent to HK$3.36. Bank of China, the third biggest, added 2.5 percent to HK$2.06.

Construction Bank completed more than 250 billion yuan of new lending as of yesterday, while ICBC advanced 200 billion yuan.

Agricultural Bank of China and Bank of China both lent about 100 billion yuan in January.

Cosco Pacific, Asia's third-largest container-terminal operator, surged 12 percent to HK$7.80, the sharpest jump on the Hang Seng Index.

China Cosco Holdings, the world's largest operator of dry-bulk ships, soared 14 percent to HK$5.31, its biggest advance since December 8. Pacific Basin Shipping Ltd, Hong Kong's biggest dry-bulk shipping line, rallied 11 percent to HK$4.60, extending its gains in the past six days to 33 percent.

The Baltic Dry Index, which tracks the cost of shipping commodities, added 4.5 percent in London yesterday, the 11th day of gains.

All but nine stocks on the 42-member Hang Seng Index climbed.

February futures added 1.9 percent to 13,030.


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