SHANGHAI'S stock market strengthened in early trade after a 3-day holiday break as the expanded Qualified Foreign Institutional Investors program raised hopes of new capital inflows.

The key benchmark Shanghai Composite Index jumped 1.37 percent to 2,293.89 points. Turnover stood at 39.6 billion yuan (US$ 6.3 billion).

China's Securities Regulatory Commission announced yesterday that it has increased the quotas for qualified foreign investment in stocks, bonds, and bank deposits from US$30 billion to US$80 billion. The yuan-denominated foreign investment has also been granted an extra quota of 30 billion yuan, which brings its total amount to 50 billion yuan.

Financials paced the advance in the morning as the expansion of QFII quotas marks a further opening up of China's capital market.

Brokers jumped the highest on hopes that foreign investors will inject more liquidity into the market, which has been caught in a four-week retreat. CITIC Securities soared 7.25 percent to 12.43 yuan. Haitong Securities surged 8.44 percent to 9.77 yuan. Industrial Securities gained 6.37 percent to 10.19 yuan.

Insurers also advanced. China Life Insurance, the country's biggest insurer, rose 3.24 percent to 16.88 yuan. Ping An Insurance jumped 3.39 percent to 37.82 yuan.

Source:shanghaidaily