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China Shares Surge 7.8 Pct

Related: Chinese Stocks Continue To Perform Strongly

Chinese Stocks Jumped For A Second Day On Monday, gaining Nearly 8 Percent Amid Surging Volume, as Investor Confidence Got A Further Boost From Several Developments, including An Easing On Rules On Share Buy-backs And The Massive U.S. Rescue Plan.

The Benchmark Shanghai Composite Index Finished Up 161.32 Points, or 7.77 Percent, at 2, 236.41, extending The 9.45-percent Gain On Friday. The Shenzhen Component Index Gained 315.07 Points, or 4.4 Percent, to 7, 469.07.

Combined Turnover Soared To 160.24 Billion Yuan (23.5 Billion U.S. Dollars) From 65.5 Billion Yuan On Friday. Gainers Outnumbered Losers By 846 To 29 In Shanghai And By 676 To 56 In Shenzhen.

Friday's Rally Came After The Government Scrapped The 0.1-percent Stamp Tax On Stock Purchases And Let Its Investment Arm Buy Shares Of Three Major Chinese Lenders On The Secondary Market.

The U.S. Treasury Over The Weekend Released Some Details On Its Proposal To Buy 700 Billion U.S. Dollars Worth Of Mortgage-related Securities Amid The Latest Efforts To Stem The Financial Crisis.

The China Securities Regulatory Commission Said On Sunday In The Draft Rules That It Would Make It Easier For Listed Companies To Buy Back Their Stocks.

Financial Stocks Led The Advance, all Jumping By The Daily Limit Of 10 Percent. Industrial And Commercial Bank Of China, the Country's Largest Lender, rose To 4.16 Yuan. Bank Of China Was Up To 3.70 Yuan And China Construction Bank Went Up To 4.61 Yuan.

China Life, the Nation's Largest Life Insurer, rose To 22.96 Yuan And Citic Securities Rose To 19.67 Yuan.

PetroChina, the Heaviest-weighted Stock In The Key Shanghai Index, also Advanced By The Daily Limit To 12.14 Yuan As Crude Oil Prices Rebounded.

The Growth In Turnover Showed Some Investors Were Starting To Lock In Profits And This Might Slow The Market Rebound In The Near Future, said Analysts.

Banks And Brokerages Might Continue To Lead The Market Higher As They Were The Main Beneficiaries Of Recent Government Policies To Shore Up Investor Confidence, according To Guangzhou Wanlong Securities.

Wu Kongyin, lianhe Securities Analyst, said: "The Shanghai Composite Index Might Meet Some Resistance Between 2, 250-2, 290 As Retailers, liquor Stocks And Steel Producers Are Starting To Show Weakness. Liquor Stocks And Steel Producers Are Starting To Show Weakness..

And A Telling Statistic: Despite The Two-day Rally, the Key Shanghai Index Is Still 63.5 Percent Below Its Record Peak In Mid-October.


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