China's stocks rally to stand high above 2,900 - Oct 15

Updated: 2010-10-15 15:46
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China's stocks rallied Friday, led by banks on improved earnings and airlines and paper makers on a stronger yuan.

The benchmark Shanghai Composite Index rose for the seventh consecutive day by 3.18 percent, or 91.52 points, to close at 2,971.16, the highest since April 26.

The gain was the most in a single day since May 24. The index ended the week with about an 8.49-percent gain.

The Shenzhen Component Index climbed 2.06 percent, or 257.79 points, to end at 12,765.50.

Combined turnover expanded to 447.95 billion yuan ($67.44 billion) from 439.07 billion yuan on the previous trading day.

Gainers outnumbered losers by 495 to 368 in Shanghai, while decliners exceeded advancers by 663 to 400 in Shenzhen.

Banks shares continued Thursday's strong performance on expected improved earnings in the third quarter.

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China Everbright Bank jumped 9.07 percent to 4.57 yuan after posting a 9.97 percent increase Thursday. Industrial and Commercial Bank of China rose 6.62 percent to 4.67 yuan.

Shares of brokerages also shot up with Industrial Securities rising by the daily limit of 10 percent to 17.99 yuan, and Changjiang Securities was also up by the daily limit to 13.52 yuan.

Paper makers also helped contribute to the market gain, boosted by the rise in yuan's value, as a stronger yuan would reduce the cost of imported pulp.

Shandong Sun Paper Industry Joint Stock Co rose by the daily limit to 13.51 yuan, and Anhui Shanying Paper Industry Co added 4.16 percent to 6.01 yuan.

China set the central parity of the yuan at 6.6497 per US dollars Friday, driving the currency's value to a record high.

Based on Friday's central parity, the Chinese currency has strengthened against the US dollar by about 2.65 percent from the rate of 6.8275 per US dollars that was set a day before the central bank's pledge to increase flexibility on June 19.

A stronger Chinese currency also pushed up stock prices of airlines. Air China Ltd surged 9.67 percent to 15.20 yuan and China Southern Airlines Co jumped by the daily limit to 10.75 yuan.