Chinese shares jump on stimulus packageNovember 10th, 2008 - 7:24 pm ICT by IANS
Beijing, Nov 10 (Xinhua) Chinese shares jumped 7.27 percent Monday, spurred by the country’s four trillion yuan ($585.98 billion) plan to boost the economy, which was unveiled over the weekend. The government pledged an active fiscal policy and moderately easy monetary policies to revive steady economic growth by expanding domestic demand.
The stimulus package targeted projects in 10 major areas, such as low-income housing, rural infrastructure, water, electricity, transport, the environment, technological innovation and rebuilding from disasters, most notably the May 12 earthquake.
The policies include a comprehensive reform in value-added taxes, which would cut industry costs by 120 billion yuan.
The benchmark Shanghai Composite Index closed up 7.27 percent, or 127.09 points, to finish at 1,874.80. The Shenzhen index advanced 6.5 percent, or 374.03 points, to close at 6,127.12 points.
Analysts said the plan demonstrated the government’s resolution to prop up the country’s economic growth. The rise in US stock market Friday helped recover investor confidence.
CITIC Securities chief analyst Cheng Qingwei said both tax reform and macro-control policies were faster and bigger than expected.
Yang Yushan, manager assistant at Harfor Funds, echoed Cheng, saying the 10 stimulus measures would change the dim predictions.
The combined turnover nearly doubled from Friday’s 40.2 billion yuan to finish at 78.636 billion yuan ($11.52 billion).