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1st LD-Writethru: Chinese shares rally on Tuesday

Xinhua, October 20, 2015 Adjust font size:

Chinese shares closed higher on Tuesday as a sudden jump by shares in state-owned companies led indexes to rise at the end of trading.

The benchmark Shanghai Composite Index advanced 1.14 percent to end at 3,425.33 points.

The smaller Shenzhen index gained 1.81 percent to close at 11,597.08 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 3.19 percent to close at 2,511.16 points.

Total turnover on the Shanghai and Shenzhen bourses stood at 905.1 billion yuan (about 142.3 billion U.S. dollars), down from 996.8 billion yuan on the previous trading day.

Over 1,900 shares saw their prices up. E-commerce and Internet finance companies led the rise while tourism and auto companies lost the most.

The market opened slightly lower in the morning following Monday's release of GDP data, which showed a slowdown of China's economy to 6.9 percent in the third quarter from 7 percent in the first half.

The indexes then fluctuated during the day before returning to positive territory just minutes before closing. Shares of heavy-weight state-owned enterprises such as China Communications Construction Company and China Railway Construction Corp. surged over 8 percent over a few minutes due to speculation about agreements to be signed during President Xi Jinping's visit to Britain.

China's stock market has recorded over 12 percent in gains since the end of September despite weak economic data showing sluggish demand.

The margin lending business, which fueled the stock market boom in the first half of the year, saw a comeback as margin loans outstanding had increased eight consecutive trading days as of Monday. The balance of margin debt on the Shanghai and Shenzhen exchanges stood at 982.19 billion yuan (154.4 billion U.S. dollars), up 8.6 percent since October.

Chinese officials have been actively cracking down on leverage trading since the stock market rout earlier this year. The margin lending balance peaked at 2,266.6 billion yuan in mid-June before gradually returning to a yearly low of 904 billion yuan on Sept. 30. Endit