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Jan. 21, 2015, 3:56 a.m. EST

Chinese stocks shoot up, marking best gain in five years

Japan stocks fall after BOJ cuts inflation forecast

By Laura He, MarketWatch


Reuters Enlarge Image
Shanghai stocks rebound strongly on Wednesday, while Japan shares retreat.

HONG KONG (MarketWatch) -- Chinese stocks posted their strongest advance since late 2009 on Wednesday, with the financial sector leading gains.

Mainland China’s benchmark Shanghai Composite Index (SHG:CN:SHCOMP)  shot up 4.7%, marking its biggest daily percentage increase since October 2009, extending gains after Tuesday’s 1.8% advance. On Tuesday, China reported a higher-than-expected economic growth for December.

On Monday, the index tumbled 7.7%, its worst decline in more than six years, triggered by a crackdown on margin trade business by the regulator.

Banks and insurers recovered strongly in Shanghai, with Bank of China Ltd. (SHG:CN:601988)   (HKG:HK:3988)  soaring 9.9%, Industrial and Commercial Bank of China Ltd. (SHG:CN:601398)   (HKG:HK:1398)  leaping 6%, and Agricultural Bank of China Ltd. (SHG:CN:601288)   (HKG:HK:1288)  spiking 5.6%. Shares of China Life Insurance Co. Ltd. (SHG:CN:601628)   (HKG:HK:2628)  were suspended from trading after a 10% surge, and Ping An Insurance (Group) Company of China (SHG:CN:601318)   (HKG:HK:2318)  popped 9.5% higher.

The advance in mainland Chinese markets also boosted Hong Kong stocks, with the Hang Seng Index (HONG:HK:HSI)  closing up 1.7%. The Hang Seng China Enterprises (HONG:CN:160462)  , which tracks Hong Kong-listed mainland Chinese companies, added 2.4%.

However, in Japan, the Nikkei Average (NIKKEI:JP:NIK)  dropped 0.5%, after the Bank of Japan cut its near-term inflation outlook, while leaving monetary policy unchanged. The broader Topix (TOKYO:JP:180460)  also fell 0.5%.

The yen (XTUP:USDJPY)   strengthened versus the dollar, trading at ¥117.67, compared with ¥118.70 late Tuesday in New York.

Other Asian markets ended higher, as Sydney’s S&P/ASX 200 (S&P:AU:XJO)   finished up 1.6%, and Seoul’s Kospi Composite Index (KOREA:KR:180721)   edged 0.2% higher.

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