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Markets

Equities rise on rumors of stock index futures

By Li Xiang (China Daily)
Updated: 2009-12-31 08:08
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Equities rise on rumors of stock index futures

Equities advanced to a two-week high yesterday, led by financials, following reports that the State Council has given the green light for stock index futures.

The benchmark Shanghai Composite Index rose 1.58 percent to close at 3262.6 points, while the Shenzhen Composite Index rose 1.04 percent to 13644.47 points.

China Business News had earlier reported that the government had approved the launch of stock index futures and the new product would make its capital market debut soon.

Analysts said blue chips and the financial sector could gain from the move, as it would increase the capital flows to the market.

Shares of futures firm China Cifco Investment Co Ltd rose to the 10 percent daily limit yesterday and closed at 40 yuan, while CITIC Securities rose 2.3 percent to 31.49 yuan.

Shares of index heavyweights also responded positively to the news, led by large oil companies and banks.

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Asia's largest oil refiner Sinopec closed up 3.14 percent at 14.14 yuan, while China Merchants Bank surged 4.95 percent to 18.02 yuan.

Shang Fulin, chairman of the China Securities Regulatory Commission, said on Dec 18 that the nation would introduce index futures at an "appropriate" time in an attempt to deepen financial market reforms. But he did not give a specific timeframe for the launch.

Analysts expect Chinese equities to rally more than 10 percent in the first two months of next year once a clear timetable for the index futures is announced.

"The market is well prepared for the new product and the launch is just a matter of time," said Liao Qing, an analyst with Sealand Securities.

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