Shanghai's key stock index rose above 2,000 points yesterday, led by airlines, following a newspaper report that China Southern and China Eastern would receive financial aid from the government.
The benchmark Shanghai Composite Index grew 2.22 percent, or 44.05 points, to close at 2,030.49 points.
Gainers outnumbered losers 839 to 21. Two remained unchanged. Turnover in the local market rose to 92.4 billion yuan (US$13.59 billion), compared with 87.9 billion yuan on Friday.
"The government's attempt to bolster the market has helped to restore market confidence," Qilu Securities Co wrote in a research note. "There is still room for more of a rebound. The rising turnover shows that investors have refound their interest."
The firm predicted the government would also repurchase shares of state-owned enterprises as a further effort to strengthen the market.
China Southern, the country's largest airline 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 close at 4.29 yuan.
Two newspapers reported yesterday that the government will inject 3 billion yuan each into China Eastern and China Southern this year.
President Hu Jintao said in Washington over the weekend that the government must adopt fiscal and currency policies to promote growth.
"A string of the government's investment plans will continue to come out in the future," Tang Xiaosheng, an analyst from Guosen Securities Co said. "A stronger rebound is expected."
On the losing side, real estate developers fell after the National Bureau of Statistics said on its Website that home sales fell in the first 10 months of the year.
China Vanke Co, the nation's largest property developer, lost 1.3 percent to close at 6.83 yuan.
(Shanghai Daily?November 18, 2008)
