Chinese stock market surged to a three-week closing high in heavy trade on Friday, as machinery and shipbuilding shares jumped on hopes that those sectors would be the next to receive government aid. The Shanghai Composite Index ended up 1.78 percent at 1,954.438 points, though it came well off a high of 1,984.728. It has gained 7.34 percent so far this year.
Turnover in Shanghai A shares expanded to a five-week high of 99.8 billion yuan ($14.6 billion) from 83.0 billion yuan on Thursday. Rising Shanghai A shares eclipsed losers by 558 to 315.
After China earlier this week announced tax cuts and subsidies to aid the auto industry, and pledged support for the steel industry, the official Shanghai Securities News reported on Friday that government officials and representatives of the equipment making industry would meet later in the day to discuss proposals for policies to assist that sector.
The proposals would then be submitted to the cabinet, the report said. The newspaper also said the shipbuilding industry might be among the next industries to receive aid. China State Shipbuilding gained 4.46 percent to 44.71 yuan while Xibei Bearing soared its 10 percent daily limit to 8.34 yuan. "The active turnover and strength of blue chips have improved sentiment, and the stimulus plans for industry may boost the index further," said Li Shiming, analyst at Xiangcai Securities.
Securities firms were very strong on hopes for a general recovery of stock market activity, which would boost their commission income. Haitong Securities jumped 7.17 percent to 10.91 yuan and CITIC Securities rose 4.05 percent to 20.58 yuan.