Stocks rise on news of government spending

By Pan Xiaoyi  |   2008-11-6  |     NEWSPAPER EDITION

SHANGHAI'S key stock index rallied more than 3 percent yesterday in the wake of surges in other markets as the United States election result brought hope that a new president would sort out the global financial mess.

Almost all sectors gained, led by financial and construction-related shares after the Ministry of Transport was reported to be outlining a 5-trillion-yuan (US$732 billion) investment plan for the next three to five years in a move to boost domestic consumption.

The Shanghai Composite Index rose 3.16 percent, or 53.91 points, to 1,760.61, after reaching an intra°?day high of 1,788.26.

Gainers outnumbered losers 853 to 24, while two remained unchanged. Turnover in the local market rose to 38.8 billion yuan, compared with 24.41 billion yuan on Tuesday.

The State Council approved a rail investment plan worth 2 trillion yuan last month. The 5-trillion-yuan plan reported yesterday will involve construction of roads, waterways, harbors and quays.

Analysts believe it will help boost employment and consumption. Cement and construction sectors soared.

Anhui Conch Cement Company led the gains of cement producers by surging 10 percent to 18.37 yuan. Ningxia Saima Industry Co and Fujian Cement Inc also rose the 10-percent daily limit.

Wen Lijun, an analyst from Nanjing Securities Co, said: "Investors are full of expectation that the next US president will bring the world financial turmoil to an end."

"Asia-Pacific stock markets were strong, following gains in the US overnight," Wang said.

GF Securities Co agreed. "Consecutive gains in US and Western markets herald rebounds in the domestic market," said a research note.

China Merchants Bank, the nation's biggest dual-currency credit card issuer, rose 9.57 percent to close at 12.71 yuan. The Industrial and Commercial Bank of China climbed 0.81 percent to 3.72 yuan, while Pudong Development Bank advanced 6.16 percent to 12.76 yuan.