SHANGHAI stocks surged this morning, led by cyclical stocks and blue chips, on expectations that the central government may take measures to stimulate the economy.
The benchmark Shanghai Composite Index jumped 44.94 points, or 2.24 percent, to 2,053.07 before the noon break and the turnover reached 64.9 billion yuan (US$10.6 billion).
The market rallied amid talks that the central government may introduce mild stimulus measures to revitalize the economy after China posted surprise falls in both exports and imports yesterday.
Investor confidence also picked up after Premier Li Keqiang affirmed the need to stabilize growth while pushing for economic restructuring, adding that China's macro control is aimed at maintaining economic growth and employment.
Cyclical industries, whose performance is tied to overall economy, advanced led by cement producers, coal miners and electricity suppliers.
Market watchers said the index also got a boost from upbeat mid-year earnings reports which may lift blue chips that have been undervalued.
Lenders gained after Shanghai Securities News reported that China's four biggest banks extended 170 billion yuan in new loans in the first week of July, compared with 270 billion yuan for the whole month of June.
Industrial and Commercial Bank of China Ltd, the nation's largest lender, added 0.5 percent to 3.95 yuan. Agricultural Bank of China rose 1.2 percent to 2.54 yuan.
Property developers surged amid speculations that the government may soon relax refinancing restrictions for homebuilders. Poly Real Estate, China's second-largest developer jumped 4.4 percent to 11.14 yuan. Gemdale Corp rose 3.6 percent to 7.46 yuan.
Gold stocks climbed as gold price hit a two-week high after the US Federal Reserve said it might maintain its highly accommodative monetary policy for the foreseeable future.
Zijin Mining Group Co, the nation's biggest gold producer, increased 2.3 percent to 2.63 yuan. Shandong Gold Mining Co added 3.3 percent to 22.65 yuan. Zhongjin Gold Corp rose 3.4 percent to 9.65 yuan.
Most oil producers advanced after oil futures closed at their highest level in 15 months yesterday on falling supplies. Offshore Oil Engineering Co surged 9.9 percent to 7.30 yuan. China Oilfield Services Ltd climbed 4.8 percent to 14.80 yuan.
