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Local stocks prolong rally into second day

By Wang Fei’er (Global Times)

08:17, May 30, 2012

Both the Shanghai and Shenzhen stock markets posted their second straight day of gains Tuesday on hopes that fresh economic stimulus measures would soon breathe life into the country's slowing economy.

The benchmark Shanghai Composite Index jumped 1.20 percent, or 28.27 points, to close at 2,389.64, and the Shenzhen Component Index shot up 1.09 percent, or 110.64 points, to finish at 10,214.74.

Investor confidence got a major boost Tuesday as expectations of a further round of stimulus spending swept through the market following the release of a Credit Suisse report Monday which claimed that 2 trillion yuan ($315.26 billion) in stimulus measures, roughly half of the 4 trillion yuan package launched by the government in 2009, would be enough to prevent the country's economy from falling further.

Infrastructure-related stocks kept their lead at the mainland's bourses Tuesday.

Home appliance stocks also surged Tuesday after the Ministry of Finance confirmed that the Chinese government will subsidize purchases of energy-saving products, including energy efficient flat-panel television sets and air conditioners, a move which is expected to stimulate more than 135 billion yuan in consumer spending.

News of the government's subsidy program drove up investor confidence in the consumer electronics sector and was enough to give home appliance stocks trading in both the Hong Kong and Taiwan markets a boost.

The Hang Seng China Enterprises Index, which tracks Chinese companies listed in Hong Kong, climbed 2.1 percent, led by appliance makers' stocks, including TCL Multimedia Technology Holdings Ltd which gained by 6.2 percent.

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