SHANGHAI'S key stock index rose for the third day in the morning session after Chinese Premier Wen Jiabao pledged a "fine-tuning" of China's economic policies to maintain strong growth.

The benchmark Shanghai Composite Index added 0.62 percent to 2,424.65 points. Turnover jumped to 50.3 billion yuan (US$7.9 billion) from yesterday morning's 35.4 billion yuan.

Wen said yesterday that the government would "fine-tune" its macroeconomic policies and maintain "reasonable" credit growth after economic growth slows and inflation eases.

This was the first official indication that authorities may suspend further monetary tightening measures after the government started implementing tightening policies to control inflation.

"We expect year-on-year growth of industrial activities to fall below 13 percent in October and inflation in November will be short of 5 percent," Guotai Junan Securities wrote in a report. "Economic growth may possibly become the priority of the government."

The report said that the central bank may lower reserve requirements for medium- and small-sized banks by the end of this year and may cut interest rates in the second quarter next year.

Banks and property developers rose during morning trade. China Vanke, the country's largest listed property developer, rose 3.2 percent to 7.64 yuan. Industrial and Commercial Bank of China went up 1 percent to 4.28 yuan.

Media firms rallied after the central government decided to increase financial support and cut taxes for such firms. The government also encouraged cultural companies to raise funds from the capital market.

Guangdong Alpha Animation and Culture Co jumped by the daily limit of 10 percent to 20.41 yuan. Beijing Enlight Media Co grew 3.6 percent to 64.75 yuan.

Source:shanghaidaily