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Stocks advance after slump

(Shanghai Daily)
Updated: 2007-03-02 13:29

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China's stocks rose as some investors judged this week's tumble, the biggest in four weeks, as excessive. China Vanke Co, the nation's No. 1 property developer, led an advance by shares that had fallen the most.

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"The market has been calming down and has stabilized after the rout,'' said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co inShanghai, which oversees about US$517 million. "Confidence will return as we see all the fundamentals still support an upside."

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, gained 1.3 percent to 2,833.45. The Shenzhen Composite Index, which covers the smaller one, rose 1.7 percent to 732.45.

Stocks had their steepest declines in a decade on February 27 amid concern that a government crackdown on investments with borrowed money will end a rally that drove benchmarks to records, according to the Bloomberg.

China's plunge, coupled with concern the US economy would slow, sparked a worldwide rout this week. The Dow Jones Industrial Average has fallen 3.2 percent in the last three sessions, while stocks across Europe and Asia also declined, extending their worst slump in four years and wiping out more than US$1.5 trillion in global market value.

The economy, which in 2005 overtook the UK as the world's fourth largest, averaged annual growth of 9.6 percent in the past five years. It expanded 10.7 percent last year.

"This is more of a short-term correction rather than a bear market,'' said Beat Lenherr, who helps manage US$7 billion of assets in Asia as Singapore-based chief investment officer at LGT Bank. China "is my favorite BRIC market." The BRIC countries are Brazil, Russia India and China.

China Vanke rose 0.49 yuan, or 3.5 percent, to 14.50. The shares slid 13 percent this week. ZTE Corp, China's biggest publicly traded phone-equipment maker, gained 2.72 yuan, or 5.8 percent, to 49.60, erasing this week's losses.