China stocks open 2% higher in response to 4 tln yuan stimulus package

Special Report:Global Financial Crisis

BEIJING, Nov. 10 (Chinese media) -- Chinese stocks opened 1.98 percent higher on

Monday, as investor sentiment got a boost from the 4 trillion yuan economic

stimulus package unveiled on Sunday.

The benchmark Shanghai Composite Index, which covers both A and B shares,

traded up 34.60 points, or 1.98 percent, to open at 1,782.31.

The index was still 71 percent lower from its record high in mid October

last year. Investor confidence had been weak on rising worries of a slowing

economy and grim corporate outlook.

China said on Sunday it will loosen credit conditions, cut taxes and embark

on a massive infrastructure spending program in a wide-ranging effort to offset

adverse global economic conditions by boosting domestic demand.

A stimulus package estimated at 4 trillion yuan (570 billion U.S. dollars)

will be spent over the next two years to finance programs in 10 major areas,

such as low-income housing, rural infrastructure, water, electricity,

transportation, the environment, technological innovation and rebuilding from

several disasters, most notably the May 12 earthquake.