China stocks surge to 7-yr highs on Silk Road building project, easing hopes
SHANGHAI, March 30 (Reuters) - China stocks surged to seven-year highs on Monday on hopes that more infrastructure spending and policy stimulus will re-energise the cooling economy and boost corporate profits.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.9 percent, to 4,088.18 points, while the Shanghai Composite Index gained 2.6 percent, to 3,786.57 points.
Infrastructure-related shares climbed 5.6 percent after Beijing unveiled details of an ambitious plan to improve links from Asia to Europe and Africa.
The project, a network of railways, highways and other infrastructure, would create a new Silk Road that President Xi Jinping said would in a decade generate $2.5 trillion in annual trade with the countries involved.
Shares were also supported by dovish comments from central bank Governor Zhou Xiaochuan at the weekend that reinforced expectations for further monetary easing to support the slowing economy.
In addition, investor enthusiasm got a boost from a commentary in Monday's People's Daily saying China's bull market can aid the country's economic restructuring. The article from the Communist Party's mouthpiece added to signs that policymakers support the stock market's rise, despite some analysts' concerns that prices have run up too much, too fast.
Among the most active stocks in Shanghai were China State Construction, up 10.0 percent to 7.94 yuan; Bank Of China, up 3.2 percent to 4.46 yuan; and Agricultural Bank Of China, up 2.8 percent to 3.74 yuan.
In Shenzhen, BOE Technology, up 1.5 percent to 4.10 yuan; Vanke, up 6.7 percent to 14.24 yuan and Zoomlion, up 10.0 percent to 7.56 yuan were among the most actively traded.
Property shares surged more than 7 percent on rumours that the central bank would hold an emergency news conference in the afternoon, which the People's Bank of China later denied.
Total volume of A shares traded in Shanghai was 56.3 billion shares, while Shenzhen volume was 29.7 billion shares. (Reporting by Samuel Shen and Pete Sweeney; Editing by Kim Coghill)
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