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Chinese shares close 1.32% higher on rallied confidence

(Xinhua)
Updated: 2008-07-28 19:31

Chinese shares ended 1.32 percent higher on Monday, led by a rallied confidence from investors.

The benchmark Shanghai Composite Index rose 1.32 percent or 37.91 points, finishing at 2,903.01 points. The Shenzhen Component Index closed at 9,974.14 points, up 0.51 percent, or 50.98 points.

Confidence from both individual and institutional investors began to rally over an expectation that the government would ease policies to fight inflation after its central bank dropped a reference to tight monetary policy in its overnight announcement, said market analysts.

The People's Bank of China (PBOC), the central bank, said in a web announcement last Sunday that it would take securing a steady and fast economic development and easing inflation as its key tasks in the second half of this year. No more tight monetary policies were referred to.

A falling oil price in the world market also contributed to the stock price rise, according to the analysts. The oil price fell 1.8 percent to around $125 per barrel on Monday.

Real estate, agricultural, forestry, medical, and machinery stocks led the rise. Tianlun Real Estate rose by the daily limit of 10 percent to 6.16 yuan ($0.9), while Lvjing Real Estate increased by 10.02 percent to close at 9.11 yuan.

Prices of gold stocks dived, on the expectation that oil prices will continue to drop, and the dollar will gradually become stronger in the second half.

Shandong Gold lost 1.72 percent to 56.99 yuan, Zhongjin Gold decreased 0.73 percent to close at 50.65 yuan, while Zijin Gold plummeted 0.38 yuan to close at 7.85 yuan.

Combined turnover increased to 99.9 billion yuan from 98.33 billion yuan over the previous close. Gains outnumbered losses by 668-41 in Shanghai and 516-84 in Shenzhen.