| Shanghai shares jump nearly 4 percent on Monday |
SHANGHAI, July 23 -- DOMESTIC stocks rallied today backed by well-performing blue-chip companies in the steel and automobile sectors.
The Shanghai Composite Index, which covers yuan-backed A shares and US dollar-denominated B stocks, jumped 3.81 percent to close at 4,213.36.
The Shenzhen Composite Index, which covers the smaller Chinese mainland market, jumped 5.06 percent to close at 1,181.45.
Chinese steel shares rose as prices of the metal rebounded and on investors' expectations that the companies may report improved first-half profits.
Baoshan Iron & Steel Co climbed 1.10 yuan (15 US cents), or 10.03 percent, to 12.07 yuan per share.
Inner Mongolian Baotou Steel Union Co advanced 10.05 percent to 6.68 yuan.
Baosteel and Baotou Steel signed a strategic cooperation frame today. The Shanghai-based steel maker will help Baotou Steel optimize its product structure and promote its added value. The two sides will jointly develop iron ore and coal resources in Inner Mongolia, according to the agreement.
Angang Steel Co, the fourth-largest steel maker in China, grew 1.78 yuan, or 10.02 percent, to 19.54 yuan per share.
Wuhan Iron & Steel Group, China's fifth-biggest steel maker by output, gained 0.96 yuan, or 10 percent, to 10.56 yuan per share.
Auto companies also reported robust growth.
FAW Car Co, a Chinese partner of Mazda Motor Corp, surged 1.05 yuan, or 9.97 percent, to 11.58 yuan.
Shanghai Automotive, China's largest auto maker, gained 1.12 yuan, or 5.34 percent, to 22.09 yuan.
Insurers faced a drop today on fears that higher bank deposit interest rates may see more customers flock to banks.
China Life Insurance Co, the nation's biggest insurer, dropped 0.39 yuan per share, or 0.79 percent, to 48.98 yuan. Ping An Insurance (Group) Co, China's second-largest insurer, dropped 0.71 yuan, or 0.84 percent, to 83.46 yuan.
The stock markets weren't shaken by the central bank's Friday move to raise interest rates and cut the tax on interest earned from savings accounts as investors largely anticipated the moves.
China's central bank announced on Friday, after markets closed, a rise in interest rates for the third time this year. It also cut the tax on interest earned in savings accounts to five percent from 20 percent.
The move was designed to cool the sizzling economy and make savings more attractive than investing in the booming stock market.
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