By Dong Zhixin (chinadaily.com.cn)
Updated: 2008-03-03 17:37

A fresh wave of buying lifted Chinese stocks on Monday, with investors expectant of favorable in-coming policies via the annual sessions of the country’s lawmakers and political advisors.

The Shanghai Composite Index opened lower due to an overnight fall on Wall Street, but reversed its course later to end the day 2.06 percent higher at 4,438.26.

"As the lawmakers and advisors meet, the expectation for favorable policies will help drive up the market," Hulin Securities said in a report, adding that more funds are entering the market.

In a survey of 50 members of the Chinese People's Political Consultative Conference (CPPCC) by Shanghai Securities News, some 30 members said the country should cut the stamp tax on stock trading. The tax was tripled to 0.3 percent in late May last year, which triggered a multiplemonth correction halving the prices of many stocks.

Anticipation for lower trading costs explained part of the recent rises on the Shanghai and Shenzhen markets.

Investors also bet on the launch of the second board market and the stock index futures soon after the meetings, as evidenced by heavy buying into the two sectors.

"Preparations for the second board market has nearly finished," Zhuang Xinyi, vice chairman of the China Securities Regulatory Commission (CSRC) said during the weekend.

The CSRC has also said it will launch the stock index futures at an appropriate time, and all the preparatory work has been completed.

The National People's Congress, China's top legislature, and the Chinese People's Political Consultative Conference, the country's top advisory body, are convening in Beijing starting this week, discussing a wide range of issues.