Banks, developers lead Shanghai index to 3.6% gain

By Lydia Chen  |   2008-6-25  |     ONLINE EDITION

SHANGHAI'S key stock index climbed today with the benchmark index posting its first back-to-back gains since June 3 on speculation a slump that erased US$1.2 trillion in market value was overdone.

The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, climbed 3.64 percent, or 101.99 points, to 2,905.01 at 3pm.

Gainers in the Shanghai market outnumbered losers 794 to five while one was unchanged.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 4.77 percent, or 38.20 points, to 839.70.

Banks as well as developers led the market higher today.

Stocks also climbed after the China Securities Journal said China Life Insurance Co has been investing "large sums" in mutual funds.

Industrial and Commercial Bank of China, the country's biggest lender, gained 1.54 percent to 5.28 yuan (77 US cents). Huaxia Bank jumped 4 percent to 10.40 yuan.

Shanghai-based Shimao Property Co surged the daily cap of 10 percent to close at 10.01 yuan. Poly Real Estate Co, the second-biggest developer by market value, added 5.69 percent to 14.67 yuan. It climbed 9.98 percent yesterday. China Vanke, the nation's biggest developer, gained 3.53 percent to 9.68 yuan.

Air China, the largest carrier by market value, increased 6.75 percent to 8.70 yuan.

Air China Ltd will work with Taiwan's two biggest airlines when it begins weekend flights to the island next month. The carrier has signed deals with China Airlines and EVA Airways Corp covering maintenance, refueling and other operations, it said in a statement yesterday.

The move by China Life, the country's largest insurer, is significant because of its size and its influence in the industry, especially its tendency to undertake large-scale purchases, China Securities Journal reported, citing unidentified people. The move may signal the end of China's equity market slump, it said.