Chinese mainland stock markets notched their largest single-day gains in almost eight months Friday after the country's top economic planner gave its nod to a raft of new infrastructure projects.
The Shanghai Composite Index finished trading at 2,127.76 points Friday, up 75.84 points, or 3.70 percent; while the Shenzhen Component Index wrapped up last week at 8,709.07 points after climbing 420.80 points, or 5.08 percent, on the day.
Both markets kicked off last week with slight rallies after China's official purchasing managers' index (PMI) for August slipped to a nine month low of 49.2, sparking expectations that the government would soon have no choice but to intervene with favorable policies to temper the weakening manufacturing sector. The government dashed these hopes Tuesday, however, when it failed to step forward with any support, sending banking, insurance, securities and real estate stocks tumbling. The Shanghai Composite and the Shenzhen Component found further room to fall Wednesday after anxieties about the non-performing loan risks facing China's banks eroded investor confidence.
Mainland markets pulled out of their tailspin Thursday after railway, construction and infrastructure shares rallied on word that the National Development and Reform Commission (NDRC) had given the green light to 25 new urban rail projects across China. The NDRC gave markets more to smile about Friday after reports emerged that the planning body had approved 11 major infrastructure projects worth more than a combined 1 trillion yuan ($158 billion), according to the Economic Information Daily.
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