China stocks rise 1.3 pct, led by metals

China's stock market rose on Wednesday, pushed up by steel and non-ferrous metals shares after the U.S. Federal Reserve slashed interest rates, lifting overseas markets.

The Shanghai Composite Index ended the morning up 1.26 percent at 1,999.926 points, near its high of 2,003.375. Gaining Shanghai A shares outnumbered losers by 895 to 32, while turnover in Shanghai A shares was active at 37.8 billion yuan ($5.5 billion), up from Tuesday morning's 24.8 billion yuan.

Baoshan Iron & Steel advanced 1.72 percent to 5.33 yuan while Shandong Gold jumped 6.03 percent to 50.08 yuan.

Analysts noted it was the fourth time since last month that the index was

testing above the 2,000-point level. Previous tests showed many investors were willing to take profits above that level, which suggests 2,100 points may be the

limit of any rally in response to the U.S. rate cut and hopes for a cut in China.

'If there is another interest rate cut in China after the U.S., it may help the index climb above 2,000 again,' said Chen Huiqin, analyst at Huatai Securities. But she added that any such rally was unlikely to last long.

A survey of 40 fund managers by the Securities Times, published on Wednesday, found 55 percent expected A shares to end their bear market next year

and enter a 'bull market'. But 75 percent also thought the index might take three years or more to regain the 4,000-point level.

INSIGMA UP ON BULGARIA DEAL

Insigma Technology rose 7.10 percent to 3.92 yuan after saying a consortium including its parent company had won a contract worth 85.6 million euros ($113.6 million) from Bulgaria's biggest thermal power plant to carry out environmental upgrades.

Insurers remained strong, with Ping An Insurance up 3.26 percent to 28.19

yuan; some cited talk that regulators would expand the areas in which they are permitted to invest.

Auto engine maker Weichai Power, which fell 1.80 percent on Tuesday after

China lost an appeal at the World Trade Organisation in a dispute over its import duties on car parts, bounced back 1.79 percent to 19.95 yuan.

($1 = 6.84 yuan)

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