The Shanghai stock market, which was closed last week for the National Day Golden Week holiday, is not likely to escape the turmoil that hit global exchanges when it resumes trading today.

The rejection by the United States House of Representatives of a US$700-billion bailout plan on September 29 sent stocks tumbling around the world. The House later passed a revised version of the plan to bolster the ailing US financial system but stocks there continued to free fall.

Last week, the Dow Jones Industrial Average ended 818 points lower, the biggest weekly point loss in seven years and the third-biggest weekly loss overall.

The Peopleís Bank of China said on Friday that the country welcomes the planís passage and it is confident China could sustain economic growth and financial stability.

The central bank said it would use macroeconomic policy to back sound growth in the economy.

To minimize the impact of the US financial crisis, the central bank also said the country would raise its ìprudent supervision of banks, while asking them to enhance their risk management.

The comment on the US bailout plan was to boost domestic investor morale to prevent the market from tumbling, said Zhang Hongbo, an analyst at Fullgoal Fund Management Co Ltd.

The remark indicated that the government may keep conducting favorable moves in the near future, so investors neednít be pessimistic about the market, Zhang said.

China has implemented measures to boost the sagging market, including scrapping a stamp duty on stock purchases and ordering state firms to buy additional shares.

The Shanghai Composite Index has added nearly 21 percent to 2,293.78 points up to September 26, the last trading day before the holiday.

(Shanghai Daily October 6, 2008)