China shares soar to 6-week closing high, autos spike

Mon Feb 10, 2014 2:08am EST

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Feb 10 (Reuters) - China shares closed at their highest in nearly six weeks in robust volumes on Monday, as investors cheered a litany of policy announcements seen favourable to earnings growth for sectors from autos to insurers and infrastructure.

The Shanghai Composite Index ended up 2 percent at 2,086.1 points, its highest since Jan. 2, while the CSI300 of the biggest Shanghai and Shenzhen A-share listings jumped 2.5 percent to its highest since Jan. 3.

Gains on Monday came in the strongest Shanghai volumes in more than two months ahead of a fresh batch of macroeconomic data later in the week. The People's Bank of China's two weekly scheduled open market operations will also come into focus, with maturities due to drain 450 billion yuan ($74.22 billion) this week.

Warren Buffett-backed BYD Co surged by the maximum 10 percent limit in Shenzhen, leading gains in the auto sector after the Chinese government extended subsidies for electric vehicles beyond 2015.

The sector was further buoyed by an announcement from the finance ministry at the midday trading break of an up to 18,000 yuan subsidy for every truck that is recycled in 2014.

Infrastructure-related companies were bolstered by a Chinese news report late on Friday that the National Development and Reform Commission is studying a plan to focus on fostering economic development on a regional basis in the world's second-largest economy.

Chinese insurers and pharmaceutical firms were buoyed by an official announcement of a merger of rural and urban pension plans. State media also reported the State Council recently ordered an acceleration in the expansion of health insurance covering serious illnesses for rural residents.

($1 = 6.0634 Chinese yuan) (Reporting by Clement Tan in SINGAPORE; Editing by Jacqueline Wong)

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