SHANGHAI stocks advanced this morning as logistics and trade firms surged after the State Council gave green light to a trial free trade zone in Shanghai.

The key Shanghai Composite Index rose 19.22 points, or 0.96 percent, to 2,013.49. Turnover was 42 billion (US$6.9 billion) by the noon break.

The State Council, China's Cabinet, yesterday approved the plan to establish a free trade zone in Shanghai, according to a statement made after a meeting chaired by Premier Li Keqiang.

Market watchers said the free trade zone will not only benefit the city's trading industry but also boost its financial and shipping sectors as well.

The free trade zone is expected to facilitate current account projects and attract more foreign capital, some market watchers said.

Shanghai Material Trading Co surged by the daily limit of 10 percent to 4.69 yuan. Shanghai International Port (Group) Co jumped 5.5 percent to 2.70 yuan.

Aircraft manufacturers led the gainers. Xi'an Aero-Engine Plc rose 4.8 percent to 18.28 yuan. China Avic Electronics Co climbed 3.3 percent to 25.19 yuan. China Aerospace Times Electronics Co added 3.7 percent to 7.37 yuan.