July 19 (Reuters) – China’s key stock index rose more than 2 percent in afternoon trade on Monday, boosted by expectations that the government will maintain stable economic policies for the rest of the year.
Premier Wen Jiabao said on Sunday that China’s economy was responding appropriately to stable policies, adding “relatively fast” growth would help create jobs and boost domestic demand. [ID:nTOE66H00H] The Shanghai Composite Index .SSEC rose to as high as 2,483.9 by 0638 GMT, following a 1.9 percent decline last week. The index, which is one of the world’s worst performers, second only to Greece, has lost over 24 percent of its value since the start of the year.
Yuan-denominated A-shares have been hard hit by Beijing’s moves to cool the country’s fiery property sector, while a raft of recent initial public offerings including that by Agricultural Bank of China (601288.SS) (1288.HK) have sapped investor demand.
“Investors are more confident that economic policies will remain stable and there is not a large possibility of major changes,” said Xu Yinhui, analyst at Guotai Junan Securities in Shanghai.
AgBank was the most active stock, trading up 0.4 percent at 0631 GMT, while property heavyweight Gemdale (600383.SS) rose 1.9 percent.
Shanghai’s property sub-index .SSEP was up 2.2 percent. (Reporting by Farah Master; Editing by Jason Subler)