Shanghai's key stock index edged up at midday, driven by financial shares on speculation a retreat in crude oil prices will slow inflation, easing the pressure on the central bank to restrict lending.
The Shanghai Composite Index added 0.77 percent, or 21.75 points, to 2,859.60 at 11:30am.
Gainers in the Shanghai market outnumbered losers 600 to 180 while 46 remained unchanged.
The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, increased 0.90 percent, or 7.59 points, to 853.69.
China Merchants Bank Co, the nation's biggest dual-currency credit-card issuer, and China Vanke Co led the gain.
Merchants Bank rose 2.83 percent to 24.75 yuan (US$3.62). Shanghai Pudong Development Bank Co, the Chinese partner of Citigroup Inc, added 2.74 percent to 22.50 yuan. Industrial & Commercial Bank of China climbed 1.19 percent to 5.11 yuan.
Vanke, the nation's biggest listed property developer, advanced 2.87 percent to 8.96 yuan. Shenzhen-based Lvgem Estate Co surged the daily cap of 10 percent to close the session at 8.02 yuan.
Oil fell 3.1 percent to US$124.44 a barrel in New York yesterday, dropping below US$125 for the first time in six weeks after a US government report showed that fuel stockpiles increased as consumption tumbled to the lowest in more than a year.
The lower oil price continued to fuel oil-related shares this morning.
China Petroleum & Chemical Corp, also known as Sinopec, the country's biggest oil refiner, added 1.53 percent to 11.27 yuan. PetroChina, the country's second-largest refiner and the biggest stock on the index based on market capitalization, increased 0.26 percent to 15.25 yuan.
But airline carriers showed a mixed response to the declining oil price.
Air China, the country's largest carrier by market value, jumped 1.12 percent to 10.84 yuan. China Southern Airlines Co, the largest by fleet size, jumped 0.60 percent to 8.34 yuan.
But China Eastern Airlines Co dipped 0.26 percent to 7.75 yuan. Shanghai Airlines Co also lost 1.52 percent to 6.46 yuan.
China Eastern Airlines Corp, the nation's third-largest carrier by fleet size denied a magazine report saying government regulators are discussing a possible merger of the company with Shanghai Airlines Co.
Elsewhere, Minmetals Development Co, the unit of China's biggest state-owned metals trader, jumped 5.88 percent to 25.38 yuan. It said its first-half profit more than tripled on acquisitions, increased sales and higher margins. Net income jumped more than 200 percent from 385 million yuan a year earlier, it said in a preliminary earnings statement.
Guangdong Midea Electric Appliances Co, China's second-biggest publicly traded appliance maker, lost 2.75 percent to 12.38 yuan. The company said it won approval from the China Securities Regulatory Commission to raise 3.56 billion yuan in an additional share offering.
