Mainland shares edge up on policy support

China stocks closed higher on Monday as investors took heart from policy support measures aimed at shoring up weak markets and promoting growth, and as speculation swirls about a possible cut in benchmark lending rates.

At the close, the Shanghai Composite index was 0.91 percent higher at 2,703.51 points. China’s blue-chip CSI300 index rose 1.13 percent, to 3,294.60 points.

The CSI300 financial sector sub-index ended 1.83 percent higher, the consumer staples sector gained 1.24 percent and the healthcare sub-index closed up 1.1 percent.

The smaller Shenzhen index turned around from earlier losses to close 0.58 percent higher. The start-up board ChiNext Composite index trimmed losses but still ended 0.63 percent lower after the securities regulator on the weekend tightened rules over goodwill impairment, which could hit some company earnings.

Shares in Chinese real estate developers jumped on rising expectations of a rate cut that could lower borrowing costs for developers and home buyers. The CSI300 real estate index added 4.18 percent.

An index tracking securities firms rose 3.06 percent. Securities firms are also seen as beneficiaries of policies to support markets and of plans to launch a new technology board.

China’s stubbornly weak credit growth has spurred talk of its first cut in benchmark lending rates in three years, but economists and policy insiders say concerns about a potential knock to its currency will likely give the central bank pause.