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By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an
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China shares rise amid regional gains
AP - Thursday, December 11
SHANGHAI, China - Chinese stocks rose Wednesday amid regional gains, led by banks after regulators announced they will be allowed to finance mergers and acquisitions.
The benchmark Shanghai Composite Index rose 2 percent, or 41.38 points, to close at 2079.12. The Shenzhen Composite Index for China's smaller second exchange rose 2.3 percent to close at 624.33.
Investors are optimistic that a government planning meeting this week will make clear how Beijing will carry out a multibillion-dollar economic stimulus plan announced last month, said Mao Nan, an analyst for Oriental Securities in Shanghai.
"This meeting will decide how and when decisions made earlier will be implemented," Mao said. "That is what investors really care about."
Shares in construction and related companies have risen on expectations they will benefit from the plan to inject money into the economy through higher spending on highways and other projects.
Banks rose after regulators issued rules allowing them to finance mergers and acquisitions in a move to help companies cope with China's economic downturn.
Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, climbed 2.8 percent gain to 4.08 yuan. China Construction Bank, Ltd. rose 3.4 percent to 4.51 yuan. Midsize lender Pudong Development Bank Ltd. surged 9.1 percent to 15.43 yuan.
Ping An Insurance Ltd. gained 4.3 percent to 27.83 yuan, and China Life Insurance, the country's biggest life insurer rose 3.8 percent to 20.83 yuan.
Citic Securities Ltd., the brokerage unit of China's biggest investment company, shot up 5.9 percent to 22.73 yuan. Sinolink Securities Ltd. advanced 9.8 percent to 28.35 yuan.
The government reported Wednesday that November wholesale prices rose 2 percent over the same month of 2007 as high energy and raw materials prices eased. That was down from October's 6.6 percent rate and August's 12-year high of 10.2 percent.
That could improve profits for producers and retailers that were hit by sharp increases in wholesale prices as energy and other costs soared. But analysts warned it also might squeeze commodities suppliers.
"Declining producer prices are a double-edged sword," said Jing Ulrich, JP Morgan's chairwoman for China equities, in a report. "While positive for downstream industries that consume raw materials, low prices erode the margins of upstream producers."
Airlines rose after the industry regulator said it was encouraging carriers to cancel or postpone aircraft deliveries due in 2009 because of falling demand for air travel.
Air China Ltd. climbed 4.2 percent to 4.99 yuan, while Shanghai airline Ltd. rose 4.1 percent to 4.88 yuan.
In currency markets, China's yuan strengthened to 6.8610 to the U.S. dollar in over-the-counter trading around 0800 GMT, up from Tuesday's close of 6.87300.
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