WB: China's growth respectable, structural reform needed
Chinese shares rose to their highest level since July 2008 on Thursday, as investor confidence received a boost with the World Bank raising its forecast for China's economic growth this year.
The benchmark Shanghai Composite Index gained 43.78 points, or 1.56 percent, to end at 2,853.9. The Shenzhen Component Index closed at 11,151.63 points, up 111.14 points, or 1.01 percent.
Combined turnover expanded to 225.08 billion yuan (32.95 billion U.S. dollars) from 186.05 billion yuan on the previous day. Gains outnumbered losses by 520 to 315 in Shanghai and 414 to 316 in Shenzhen.
The World Bank said Thursday morning that it had raised its forecast for China's economic growth rate to 7.2 percent in 2009 from its earlier forecast of 6.5 percent.
Premier Wen Jiabao also gave a boost to the market, saying Wednesday that the economy, which was at a critical juncture, had begun to recover "steadily."
The economic situation had started to show positive changes, favorable factors were increasing, and the overall situation had stabilized and was improving, he told an executive meeting of the State Council (Cabinet).
Energy shares performed strongly after crude oil rose 56 cents to 71.03 U.S. dollars a barrel on the New York Mercantile Exchange.
PetroChina, the country's largest oil producer, rose 1.15 percent to 14.04 yuan, while Sinopec, Asia's top oil refiners, edged up 3.07 percent to 10.41 yuan.
Financial shares gained as Wen said Wednesday the government should continue a pro-active fiscal policy and moderately relaxed monetary policy.
The financial sector rose 1.52 percent. China Construction Bank went up 5.2 percent to 5.87 yuan and China Industrial Bank rose 4.05 percent to 1.31 yuan.
Medical shares rose 2.07 percent as increasing cases of A/H1N1 flu infections continued to drive up demand for medical care and medicine.
Beijing Tiantan Biological Products rose by the 10-percent daily limit to 23.87 yuan after announcing Wednesday that it had received a seed strain of A/H1N1 from the World Health Organization and had started to develop a flu vaccine.
Henan Taloph Pharmaceutical, Guilin Layn Natural Ingredients, Hualan Biological Engineering and Apeloa Kangyu also rose by the daily limit of 10 percent to 8.64 yuan, 35.04 yuan, 36.96 yuan and 10.2 yuan, respectively.
As of 6 p.m. Wednesday, China had 264 flu cases on the mainland with no fatalities. Source: Xinhua