Market rebounds on expectations of stimulus

By Lydia Chen  |   2008-10-20  |     ONLINE EDITION

SHANGHAI’S key stock index rebounded in the afternoon session on speculation the slowest growth in five years will prompt the government to accelerate efforts to bolster the economy.

The Shanghai Composite Index jumped 2.25 percent, or 43.35 points, to 1,971.01 points at 3pm.

Gainers outnumbered losers 773 to 44 while seven did not change.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 3.14 percent, or 15.86 points, to 520.38 points.

China's economy expanded 9.9 percent in the third quarter, the statistics bureau said today in Beijing. Inflation cooled to 4.6 percent in September from 4.9 percent in August.

The economic expansion was the weakest since the second quarter of 2003, when growth slumped because of the severe acute respiratory syndrome, or SARS, epidemic.

A strong rebound in the financial sector contributed to the market rally in the afternoon.

China Vanke Co, the nation's largest publicly traded property developer, increased 5.78 percent to 7.14 yuan (US$1.05). Poly Real Estate, the second biggest, gained 6.22 percent to 15.53 yuan. North Star, a Beijing-based property developer, added 4.61 percent to finish the day at 3.18 yuan.

China will cut transaction fees for home sales to encourage people to buy apartments, the cabinet said in a statement posted on the government Website yesterday.

Home sales by volume plunged 55.5 percent and 38.5 percent in Beijing and Shanghai in the first eight months from a year earlier, Xinhua news Agency reported over the weekend, citing the China Real Estate Association.

Securities shares surged over expectations that the government will create policies to boost the economy and the plunging stock markets.

Citic Securities hiked 9.72 percent to 20.54 yuan while Haitong Securities climbed the daily cap of 10 percent to finish at 20.46 yuan.