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Chinese projects lift stocks

Friday, September 07, 2012 3:19 PM

BEIJING, Sept. 7 (UPI) -- China announced more than $134 billion in infrastructure projects this week, stepping up its intention to stimulate the economy, an analyst said.

"The decision for the Chinese government to intensively announce these projects ... signals a significant change in its policy stance from the incremental and reactive approach to a more decisive and proactive approach," Nomura economist Zhiwei Zhang wrote in a research note.

Investors interpret the announcement as a green light on construction spending, which sent the Shanghai composite index up 4.5 percent in midday trading Friday.

The index closed with a gain of 3.7 percent after the announcement of plans that include 25 subways lines and 13 large highway projects.

Credit Agricole economist Dariusz Kowalczyk in Hong Kong said the isolated markets of China were "very sentiment-driven, very driven by what the government is doing."

Other Asian stock markets, rose Friday with support from the European Central Bank's announcement of a short-term bond-buying program, which sent stocks higher across Europe and on Wall Street.

In China, the Shenzhen market gained 3.8 percent Friday. The Hang Seng index in Hong Kong added 3.1 percent and South Korea's Kospi index rose 2.6 percent.

Japan's Nikkei 225 index added 2.2 percent.

(Source: UPI )
(Source: Quotemedia)

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