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Talk of more moves and ratio cut sends index up

SHANGHAI'S key stock index soared more than 3 percent yesterday, its biggest gain in two weeks, on speculation that an additional stimulus package would be launched and the reserve requirement ratio would be cut.

The Shanghai Composite Index surged 3.02 percent, or 65.03 points, to close at 2,218.33, extending its advance to 22 percent this year. A total of 887 out of 889 stocks gained, with the remaining two falling. Turnover almost doubled to 112.23 billion yuan (US$16.5 billion) from 61.35 billion yuan on Monday.

"There is growing expectation of a lower reserve requirement ratio," said Wu Ling, an analyst at S&E Securities Brokerage Co. "The rise in turnover shows market sentiment is recovering along with stable overseas markets." He said there was expectation that more favorable measures would be launched.

But some analysts cautioned against relying on turnover remaining high and forecast that it's possible for shares to correct today.

Nonferrous metals led the gains on soaring metal prices, which triggered speculation of an economic recovery. Jiangxi Copper Co and Yunnan Copper Industry Co jumped by the 10-percent daily cap to 18.70 yuan and 15.26 yuan. Chengde Xinxin Vanadium and Titanium Co added 7.56 percent to 7.40 yuan.

Real estate firms rebounded and gave the index a boost after indications that property markets in some regions showed signs of recovery as transactions rose. Poly Real Estate Group Co soared 3.45 percent to 21.56 yuan while Shanghai Lujiazui Finance and Trade Zone gained 2.65 percent to 20.11 yuan. Shanghai-based Shimao Co surged 4.55 percent to 9.44 yuan.

China Life, the nation's biggest insurer, added 2.53 percent to 21.92 yuan on higher premium income. The Industrial Bank Co jumped 1.37 percent to 21.45 yuan.

Other advancers included China COSCO Holdings Co, the world's largest operator of dry-bulk ships, which gained 3.56 percent to 10.75 yuan.


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