BEIJING, Nov. 14 (Xinhua) -- Chinese shares closed 3.05 percent higher on Friday, extending a 3.68 percent gain on Thursday and tracking the huge rally on Wall Street overnight.

The benchmark Shanghai Composite Index, which covers both A and B shares, was up 58.82 points, or 3.05 percent, to close at 1,986.44. The Shenzhen Component Index rose 296.38 points, or 4.66percent to close at 6660.41 points.

The combined turnover climbed to 127.9 billion yuan (18.8 billion U.S. dollars) from previous day's 115 billion yuan.

Gains outnumbered losses by 814 to 4 on Shanghai and 679 to 5 on Shenzhen.

Following Thursday's rise, the market kept going up on Friday, driven by the strong expectation that the central bank may lower the benchmark interest rate during the weekend.

The interest rate of three-month central bank notes dropped 81.19 basis points, or nearly one percent, on Thursday, lower than the interest rate level in the latter half of 2006.

The decline in market interest rate is likely to herald a cutdown on benchmark interest rate, said analysts.

Property developers became the leading force driving the stock market higher on Friday as the recent policies would benefit the sector greatly.

China Vanke, China's largest real estate firm, rose 4.06 percent to close at 6.92 yuan. The stock has gained more than 21 percent since China announced the ten stimulus measures.

Securities companies also rose sharply on Friday on market hearsay that the pilot program of short-selling and margin lending would launch soon that involved clients with total assets above 1 million yuan.

CITICS Securities jumped 4.88 percent to close at 21.05 yuan and Haitong Securities soared by the daily limit of 10 percent to close at 14.78 yuan.

Despite the recent rise, securities companies and securities investment fund companies remain cautious over the market. Investors tend to take profits from short-term speculation, analysts said.

The future of global financial crisis remained unclear and more measures should be taken to stabilize the Chinese economy, analysts said.
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