China A-shares end morning higher led by metals, financials -UPDATE

China A-shares ended the morning session higher, with metals stocks in favor after a rise in commodity prices and financials gaining after Bank of Nanjing flagged about 70 pct net profit growth for 2008.

Bank of Nanjing (SHA 601009) surged more than 3.7 pct, while Bank of China (BOC) (SHA 601988; HK 3988) was up about one pct as Royal Bank of Scotland's stake sale ended an overhang on the mainland lender's stock.

The benchmark Shanghai Composite Index ended the morning up 27.06 points or 1.45 pct at 1,890.42.

'The market rebounded in line with a recovery in the regional markets. Investors were impressed by a substantial rise in money supply last month, and expect increasing capital inflows to improve liquidity in the stock market, 'said Cao Xuefeng, an analyst with West China Securities.

The central bank said late yesterday that annual growth in China's broad M2 measure of money supply rose to 17.8 pct last month from 14.8 pct in November.

Cao Yan, an analyst with Soochow Securities noted that speculation of further interest rate cuts in the near term also partly offset worries about upcoming earnings reports.

Baoshan Iron & Steel (SHA 600019) edged up 0.02 yuan at 4.98. The official Shanghai Securities News reported that net profit at its parent company fell 32 pct last year to about 23 bln yuan.

Jiangxi Copper (SHA 600362; HK 0358) added 0.49 yuan or 4.14 pct to 12.33 after slumping about seven pct yesterday and Huludao Zinc Industry (SZA 000751)rose 0.10 yuan or 3.32 pct to 3.11.

Coal producers were also supported by a rebound in crude oil prices, with China Shenhua Energy (SHA 601088; HK 1088) rising 0.32 yuan or 1.74 pct to 18.69.

Among financial stocks, Bank of China (BOC) gained 0.03 yuan or 1.03 pct to 2.95 after Royal Bank of Scotland sold up to 2.37 bln usd worth of Hong Kong-listed shares in BOC, following a stake reduction by Hong Kong's Li Ka-shing last week.

Bank of Nanjing climbed 0.32 yuan or 3.74 pct to 8.88, while Industrial and Commercial Bank of China (SHA 601398, HK 1398) rose 0.05 yuan or 1.44 pct to 3.53.

Ping An Insurance (Group ) Company of China (SHA 601318) rose 1.43 pct or 5.18 pct to 29.03 yuan and CITIC Securities (SHA 600030) rose 0.55 yuan or 2.98 pct to 18.99.

The Shanghai A-share Index was up 28.42 points or 1.45 pct to 1,984.70, while the Shenzhen A-share Index added 10.23 points or 1.70 pct to 611.16.

The FTSE/Xinhua China A 50 Index was up 125.53 points or 1.88 pct at 6,794.73 and the FTSE/Xinhua China A 200 Index rose 89.68 points or 1.70 pct to 5,356.48.

(1 usd = 6.83 yuan)

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