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In early trading, the FTSE 100 index of leading shares increased by 4,495.72, hot on the heels of strong gains in Asia.
News of the Chinese stimulus package boosted shares in companies specialising in construction equipment as hopes emerged that some of the money would make its way into public projects, reports the Times.
The strongest gains were seen in Xstrata which gained 13.58 per cent, pushing it up to £12.13.
Meanwhile, Rio Tinto surged 12 per cent to £29.33.
China's stimulus package was unveiled by the country's state council over the weekend.
It has also been reported that president-elect Barack Obama has called for a second stimulus package for the US economy.
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