SHANGHAI stocks buoyed up on the International Monetary Fund's forecast for a faster global economic growth rate and on renewed hopes for bank reserve cut as food prices fell for the fourth straight week.

The Shanghai Composite Index jumped the most in a week by 1.33 percent to 2,366.11 points. Turnover stood at 40.3 billion yuan (US$6.4 billion) by the noon break.

Financials led the rally in the morning, gaining 2.5 percent on average. Industrial and Commercial Bank of China, the nation's largest lender, added 0.9 percent to 4.38 yuan. Citic Securities Co surged 2.4 percent to 13.09 yuan. China Life Insurance Co, the country's biggest life insurer, rose 1.8 percent to 17.13 yuan.

Aijian Securities cautioned investors about a downturn risk in the afternoon session if turnover remains low. The brokerage said the market is still in correction.

IMF is more optimistic about global economic recovery and raised its estimate for the world's economic growth to 3.5 percent, 0.2 percentage points higher than its forecast made in January, as the euro region is stabilizing and the US market is improving.

Cargo shippers gained on a rosier outlook for Chinese traders. China COSCO Holdings Co, Asia's biggest shipper, jumped 1.8 percent to 5.22 yuan. COSCO Shipping Co, a unit of China COSCO, soared 1.7 percent to 4.86 yuan, and China Shipping Container Lines Co, edged up 0.3 percent to 3.15 yuan.

The Ministry of Commerce said yesterday the prices of agricultural products fell for four weeks running due to bumper vegetable supplies as temperatures climb. Vegetable prices dropped 13.5 percent in the past four weeks, while pork prices continue to retreat for the 11th consecutive week.

Analysts said the central bank may lower the reserve requirement for commercial banks soon as inflationary pressure is waning.

Source:shanghaidaily