Broad rally lifts Shanghai index

AN across-the-board rally led shares in Shanghai higher for the second-straight session yesterday, fueled by buying in the real estate and telecommunications sectors.

The Shanghai Composite Index's gain came as the yuan rose to a record high against the US dollar, meaning yuan-back assets are worth more. The yuan rose to 7.3079 versus the US dollar as of 5:30pm, according to the China Foreign Exchange Trade System.

The central government also approved construction of a broadband mobile network, triggering a surge in telecommunications shares.

The benchmark Shanghai Composite Index, tracking yuan-denominated A shares and hard-currency B chips, added 75.54 points, or 1.44 percent, to finish at 5,308.89. Gainers outnumbered losers 548 to 247 with more than 100 stocks closing flat.

"The real estate and telecommunications sectors rekindled enthusiasm among investors, which could be the start of a new rally," said Dong Boming, an analyst with Huatai Securities.

Poly Real Estate Group Co soared 6.75 percent to 62.98 yuan (US$8.61). Shanghai Lujiazui Finance & Trade Zone Development Co gained 3.08 percent to close at 24.73 yuan.

The State Council, China's cabinet, approved a plan to build a next-generation broadband wireless communication network, according to a meeting that was held in Beijing on Wednesday.

Two other technology projects in the fields of water pollution control and pharmaceutical manufacturing were also approved at the meeting, as "they are of great significance to boosting China's independent innovation capability and industrial competitiveness."

China United Telecommunications Corp soared 8.28 percent to 12.29 yuan. Datang Telecom Technology Co gained 4.99 percent to 18.94 yuan.