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Shanghai Composite up 0.23% in morning trading

Shanghai Composite up 0.23% in morning trading

SHANGHAI stocks snapped a two-week losing streak as investors are boosted by the prospect of monetary easing and rising home prices, even though overseas markets slumped over Cyprus's bailout crisis.

The Shanghai Composite Index gained 0.23 percent to 2,245 points by the noon break, led by financials, building materials makers and property developers. The turnover stood at 40.8 billion yuan (US$6.5 billion).

The government may ease monetary policy to boost market liquidity, said the Bank of East Asia in a research note today.

"China's foreign exchange reserves grew by a record 683.7 billion yuan in January. If the forex reserves continue to rise, the Chinese central bank may be forced to inject more Chinese yuan into the market to hedge currency risks," the Hong Kong-based lender said.

Lenders gained an average of 0.6 percent in morning trading. Shanghai Pudong Development Bank added 0.3 percent to 10.51 yuan. Bank of Communications and China Merchants Bank both advanced 0.4 percent to 4.68 yuan and 12.53 yuan respectively.

Property developers and building materials makers rallied after the National Bureau of Statistics said yesterday that home prices rose at a fast pace last month.

China Vanke Co, the nation's biggest developer, climbed 1.3 percent to 10.83 yuan. Poly Real Estate Group, the second-biggest, rose 1.7 percent to 10.94 yuan. Anhui Conch Cement Co, China's biggest producer of the material, increased 2.5 percent to 16.72 yuan.

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