Shanghai index closes above 2,000 points

By Lydia Chen and Pan Xiaoyi  |   2008-11-17  |     ONLINE EDITION

SHANGHAI’S key stock index closed higher and surpassed the 2,000-point level today led by airlines on a newspaper report that China Southern Airlines and China Eastern Airlines would receive financial aid from the government.

The benchmark Shanghai Composite Index added 2.22 percent, or 44.05 points, to 2,030.49 points. It was the first time the market closed above 2,000 points since October 14.

Gainers outnumbered losers 839 to 21 while two did not change.

The Shenzhen Composite Index, which tracks the smaller domestic market, was up 3.35 percent, or 18.28 points, to 563.61 points.

China Southern, the country’s largest carrier by fleet size, rose 9.88 percent to 3.67 yuan. China Eastern, the nation's third-biggest carrier by fleet size, jumped the 10 percent daily limit to 3.85 yuan. Air China, the largest by market value, climbed 9.93 percent to 4.65 yuan while Shanghai Airlines advanced 10 percent to 4.29 yuan.

The government will inject 3 billion yuan each into China Eastern and China Southern this year, which will then be given to the listed units, Shanghai-based Oriental Morning Post said today. China's money-losing airlines have asked the government for help to offset slowing demand and higher fuel prices.

The airlines “have been seeking capital injections from the government, but no result can be confirmed at the moment,'' Luo Zhuping, Shanghai-based China Eastern's board secretary, told Bloomberg News today.

President Hu Jintao said at the G20 Summit that government should enact essential fiscal and currency policies to promote economic growth to dodge the economic recession.

“A string of the government’s investment plans will continue to come out in the future. Besides, the loosened lending controls will improve market liquidity. A stronger rebound is expected,” said Tang Xiaosheng, an analyst from Guosen Securities Co.