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China's key stock index, Shanghai Composite, gains 1.5 percent to end at 2-year high.

The America's Intelligence Wire

| July 03, 2006 | COPYRIGHT 2003 Financial Times Ltd. (Hide copyright information)Copyright

(From AP Worldstream)

Byline: NATASHA LISOVA

Chinese stocks surged to a two-year high on Monday after the government announced new rules that will allow investors to borrow from brokerages to buy and sell shares.

The benchmark Shanghai Composite Index gained 1.5 percent to 1,697.28, its highest close since it finished at 1,715.14 on April 13, 2004. The Shenzhen Composite Index rose 1.6 percent to 440.13.

The China Securities Regulatory Commission issued trial regulations Sunday outlining how approved brokerages can lend funds to their clients for the purchase of shares or lend stocks to them for sale.

The rules, to take effect Aug. …

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