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Stocks rebound as investors take a shine to banks

SHANGHAI'S key stock index rebounded today, gaining more than 1.5 percent after suffering its biggest single-day drop in eight months yesterday.

Lenders led the gains on speculation the central bank will act to rein in bank lending.

The benchmark Shanghai Composite Index rose 1.69 percent, or 55.13 points, to close at 3,321.56 points. Turnover shrank to 219.8 billion yuan (US$32.32 billion) from Wednesday's record transaction volume of 296.9 billion yuan. Gainers outnumbered losers 550 to 306 and 16 remained unchanged.

The index dropped 5 percent yesterday amid profit taking.

The Shenzhen Composite Index, which tracks the smaller domestic market, rose 1.11 percent to close at 1,084.05 points.

China's central bank will use market tools to control lending growth and will maintain a "moderately loose monetary policy" to support the nation's economic recovery, said Su Ning, deputy governor of People's Bank of China.

Industrial & Commercial Bank of China, the nation's biggest lender, added 3.29 percent to 5.34 yuan. China Construction Bank advanced 6.02 percent to close at 6.52 yuan. Bank of China increased 3.81 percent to 4.63 yuan.

Baoshan Iron & Steel Co, the nation's biggest steel maker, soared 4.54 percent to 9.45 yuan. Wuhan Iron and Steel Co was up 4.17 percent to 10.98 yuan. Handan Iron & Steel Co rose 1.96 percent to 7.27 yuan.


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