China shares up on hopes government eases credit

The benchmark Shanghai Composite Index rose 2.99 percent to close at 2,861.42. The Shenzhen Composite Index added 3.41 percent to close at 852.77.

Investors were encouraged by a government economic conference last week, said Mao Nan, an analyst for Oriental Securities. He said no results were released from the closed meeting but investors were optimistic.

"Investors are looking at whether the government might loosen macroeconomic controls," Mao said. "People somehow have an expectation from the conference."

Ping An Insurance Co. rose 4.5 percent. China's biggest lender, Industrial & Commercial Bank of China Ltd., rose 3.1 percent, while midsize lender China Merchants Bank was up 4.2 percent and Pudong Development Bank Ltd. gained 3.9 percent.

Poly Real Estate Group soared by 6.7 percent. The country's biggest developer, China Vanke Ltd., rose 3.8 percent.

The main Shanghai index is down some 50 percent since hitting a record high on Oct. 16 but has gained 4.5 percent this month.

Investors were encouraged by the release of data last week that showed June inflation easing, which prompted suggestions Beijing might try to boost economic growth by easing its tight credit policies.

"We think the rise of the stock markets is going to last at least till the Olympics because of the positive policy influence," said Zhai Peng, a strategist for Guotai Junan Securities. "It's just that the mood of investors is not quite high at the moment. But in the long run, it's still the macroeconomy that will determine the market's direction."

In currency markets, China's yuan fell slightly to 6.8267 to the U.S. dollar.