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1st LD-Writethru: China stocks close at 7-yr high

Xinhua, April 10, 2015 Adjust font size:

Chinese stocks surged to new highs on Friday, with the Shanghai Composite Index climbing above the key benchmark of 4,000 points at closing for the first time since early 2008.

The Shanghai Composite Index finished at 4,034.31 points, up 1.94 percent, or 76.78 points, while the Shenzhen Component Index gained 1.57 percent, or 216.6 points, to close at 14,013.33 points.

Total turnover on the two bourses amounted to 1.27 trillion yuan (about 206.45 billion U.S. dollars), lower than the 1.50 trillion yuan the previous trading day.

Banks, medical care and biological pharmacy led the gains.

The banking sub-sector surged over 3 percent. Ping An Bank, a Shenzhen-based private bank established in 1987, was up by the daily limit of 10 percent to close at 19.8 yuan per share.

The medical care sector climbed by 6 percent, with a string of shares rising by the daily limit of 10 percent. Guangzhou Improve Medical Instruments surged by the daily limit to close at 18.56 yuan per share.

Analysts expect the upward trend to continue next week in spite of the upcoming wave of IPOs, which will dampen liquidity. Shares related to the financial sector and infrastructure construction are recommended.

CITIC Securities analyst Sun Xiwei advised caution in future trading, citing the fact that the historic high is not necessarily a correction point, and a slower bullish market is preferred by market players.

China's consumer price index, the main gauge of inflation, grew 1.4 percent year on year in March, the same as in February, but quickening from the 0.8 percent gain in January, the National Bureau of Statistics said on Friday.

The producer price index, which measures wholesale inflation, plunged 4.6 percent year on year in March, a 37th consecutive month of declines, adding to continued weak market demand.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 2.26 percent to close at 2,552.83 points. Endi