Key stock index on the way up for a third day

By Pan Xiaoyi  |   2009-2-5  |     NEWSPAPER EDITION

SHANGHAI'S key stock index rose a third consecutive day on expectations that the government's stimulus packages would revive economic growth.

The Shanghai Composite Index added 2.28 percent, or 46.94 points, to 2107.75 points.

Turnover continued to swell to 110.7 billion yuan (US$16.28 billion), up from yesterday's 96.7 billion yuan.

"The local benchmark index has been outperforming surrounding markets since last November when plans to revive the country's 10 key sectors were revealed. Industries receiving strong support from the government have been actively traded," Haitong Securities Co said in a research note.

China's banking stocks led the gains after new loans in January reached a record high of 1.2 trillion yuan, up 49 percent from a year earlier.

The majority of the loans have gone to railway, highway, electricity grid and infrastructure under the stimulus package.

Industrial & Commercial Bank of China gained 2.95 percent to 3.84 yuan. China Construction Bank rose 2.7 percent to 4.19 yuan while Bank of China added 1.94 percent to 3.16 yuan.

China State Shipbuilding inched up 0.26 percent to 49.68 yuan after a report that the government would approve a plan this week to bolster the industry.

China Eastern Airlines, the nation's third-largest carrier by fleet size, surged 3.11 percent after new chairman Liu Shaoyong said the carrier expected a significant decrease in losses this year, a slight profit next year and increased profit in 2011.