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UPDATED: February 16, 2009
Chinese Shares Jump More Than 3% on Reported Gov't Stimulus Plan
The rally was fueled by positive news or market talks

Chinese shares staged a strong rebound Friday from slight losses over the previous two days' trading, on the reported government stimulus plan involving the telecommunications and electronics sectors.

The Shanghai Composite Index advanced 3.23 percent, or 72.7 points, to close at 2,320.79 points.

It ended the second trading week after the national Lunar New Year holiday with an impressive rise in the benchmark index from 2,011.68 points on Feb. 2.

The smaller Shenzhen Component Index gained 3.73 percent, or 309.95 points to close at 8,628.75 on Friday.

Combined turnover expanded to 252.63 billion yuan (36.97 billion U.S. dollars) from 221.1 billion yuan on Thursday.

Gainers outnumbered losers on both markets, by 848 to 28 in Shanghai and 742 to 15 in Shenzhen.

The rally was fueled by positive news or market talks.

The country's central bank said Thursday, loans made in China in January amounted to 1.62 trillion yuan, an increment of 814.1 billion yuan, or 103.6 percent, on the same month of 2008.

Analysts said government policies to encourage lending had taken effect, which would have a positive impact on economic recovery.

Shares of electronics companies posted a big rise after the 21st Century Business Herald reported the government was expected to invest 600 million yuan in the telecommunications and electronics industries.

Sichuan Changhong Electric Co. rose by the daily limit of 10 percent to close at 4.84 yuan. Shanghai-based SVA Electron Co. also advanced by the daily limit of 10 percent to 3.74 yuan.

The property sector was spotlighted as well after market speculation that it was the most likely to receive the tenth stimulus plan from the government among three industries including property, energy and finance.

Shenzhen Heungkong Holding Co. rose by the daily limit of 10 percent to end at 5.68 yuan. China Vanke, the country's largest residential real estate developer, moved up 5.30 percent to 8.55 yuan.

Chalco, the nation's biggest aluminum producer, rose 8.77 percent to 11.41 yuan after its parent company, Aluminum Corp. of China, or Chinalco, announced Thursday it would invest 19.5 billion U.S. dollars in mining giant Rio Tinto Group, bailing out the latter while securing access to more resources for the state-owned Chinese company.

It also helped lift shares of other aluminum producers. JiangsuAlcha Aluminium Co. gained 7.05 percent to 9.41 yuan.

China Railway Group Ltd. climbed 7.69 percent to 6.02 yuan after the company announced Thursday night it had won 11 construction contracts worth of up to more than 23 billion yuan.

Chen Dongqi, deputy director of the Academy of Macroeconomic Research of the National Development and Reform Commission, forecast at a conference in Shanghai on Thursday that the country's A-share market would maintain an upward trend before the opening of annual parliamentary session in early March.

(Xinhua News Agency February 16, 2009)

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