SHANGHAI stock market seesawed between gaining and losing territories in the morning session following Premier Wen Jiabao's pledge that his government would maintain anti-inflation monetary policies while more than 750 firms said they had made profits in the third quarter.

The Shanghai Composite Index inched up 0.35 percent to 2,325.30, the first rise in five trading days. Turnover remained low at 26.1 billion yuan (US$4.1 billion)

Financials were one of the few sectors that saw gains in morning trading with securities shares rallying after China Securities Journal said the country would soon roll out plans to expand its pilot scheme for margin trading and short selling of stocks by increasing the number of collateral stocks and other securities used in the program.

CITIC Securities, the country's largest brokerage, gained 3.19 percent to 11.64 yuan. Industrial & Commercial Bank of China edged up 0.72 percent to 4.18 yuan.

Meanwhile, by the end of October 17, 753 out of 1,043 firms listed on the mainland's A-share market have reported annual profit growth from July to September - while 290 said their year-on-year net profit had declined.

China's manufacturing activity may have expanded in October for the first time in four months, according to a preliminary purchasing managers index released by HSBC Holdings Plc and Markit Economics today.

However, the reading of 51.1, which indicates an expansion, came after Wen had said over the weekend that China must continue efforts to control food and housing prices to ease soaring inflation and maintain economic development and social stability.

Source:shanghaidaily