Chinese stocks close higher on Monday as tightening concerns ease

An individual investor is seen at a brokerage house in Fuyang, east China’s Anhui Province, July 4, 2011. The benchmark Shanghai Composite Index strengthened to 2812.82 on Monday, up 53.46 points, or 1.94 percent. The combined trading volume of China’s stock exchange centers in Shanghai and Shenzhen exceeded 250 billion yuan (38.66 billion U.S dollars) on Monday.(Xinhua/ Lu Qijian)

BEIJING, July 4 (Xinhua) — Chinese shares closed higher on Monday as slower manufacturing growth eased investors’ worries of further tightening measures.

The benchmark Shanghai Composite Index moved up 1.94 percent, or 53.46 points, to close at 2,812.82.

The Shenzhen Component Index surged 2.16 percent, or 263.09 points, to finish at 12,441.17.

Combined turnover rose to 253 billion yuan (39.13 billion U.S. dollars) from 189.6 billion yuan on the previous trading day.

Gainers outnumbered losers by 904 to 10 in Shanghai and 1,261 to 13 in Shenzhen.

The manufacturing sector expanded at its slowest pace in 28 months in June, with the Purchasing Managers Index (PMI) fell to 50.9 percent, according to the China Federation of Logistics and Purchasing. A reading above 50 percent indicates economic expansion.

The fall in PMI, together with the report that Vice Premier Wang Qishan on Sunday urged lenders to increase financing for small businesses to ease fundraising difficulties, provided comfort to investors as they expected the country to adopt less tightening measures in the second half of the year,analysts said.

The nonferrous metal sector led the rise, up 3.95 percent across the board. Jiangxi Ganfeng Lithium Co. and Zijin Mining Group Co. both rose by the 10-percent daily limit to 35.19 and 5.28 yuan per share, respectively.

The auto sector rose, with shares of both BYD Company Limited and Wanxiang Qianchao Co. up by the 10-percent daily limit to 30.8 yuan and 9.38 yuan per share, respectively.

The banking sector also increased. Industrial Bank Co. rose 5.11 percent to close at 14 yuan per share while Shanghai Pudong Development Bank Co. climbed 3.7 percent to 10.1 yuan per share.

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