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Stock markets hoisted by Chongqing-based firms, brewers soak up gains

By Yu Xi  (Global Times)

08:32, August 22, 2012

Markets in Shanghai and Shenzhen were able to record slight victories Tuesday after shares of Chongqing-based firms skyrocketed in response to a local investment plan.

The Shanghai Composite Index advanced 11.31 points, or 0.54 percent, to close at 2,118.27; while the Shenzhen Component Index inched up 0.12 percent, or 10.86 points, to end at 8,849.49.

Both benchmarks opened lower Tuesday thanks to lingering pessimism from the pervious day, but stepped up quickly in early trading due to a rally staged by shares of Chongqing-based firms as well as shale gas, touch screen and Internet stocks. Most of the early gains were erased in the afternoon session though after rumors emerged that the central bank might delay its plan to reduce interest rates, say analysts.

Shares on Chongqing boards surged sharply on reports that the city's government intends to invest 1.5 trillion yuan ($235.5 billion) into local industrial development over the next three years. The news helped Shanghai-listed Chongqing Gangjiu Co and Shenzhen-listed Chongqing Sanxia Paints Co both shoot to the daily limit Tuesday.

Chinese brewers also rose broadly Tuesday following the release of positive earnings reports from several of the sector's largest players. Shenzhen-listed alcohol producer Wuliangye Group added 1.29 percent to 35.30 yuan after the company disclosed a 50 percent year-on-year surge in its net profits during the first half. Shanghai-listed Kweichow Moutai Co, a major rival of Wuliangye, rose 1.35 percent to 235.79 yuan after reporting a 42.6 percent annual surge in its profits during the same period.

Real estate developers took another hit Tuesday on rumors that the government may soon expand a trial property tax system. Poly Real Estate Group gave up 1.90 percent to 9.83 yuan.

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