SHANGHAI'S key stock index rose in the morning session today thanks to a broad recovery among blue chips.
The Shanghai Composite Index gained 1.29 percent, or 34.25 points, to 2,685.98 at 11:30am.
Gainers in the Shanghai market outnumbered losers 787 to 31 while two were unchanged.
The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 2.85 percent, or 22.39 points, to 807.27.
The Shanghai market ended a four-day losing streak yesterday after the state news agency said the country's stock markets will be "stable and healthy."
The Shanghai index has lost nearly 50 percent of its value so far this year, making it the worst-performing market in the world.
Blue chips in real estate, banking and metal sectors all enjoyed a good morning.
Shanghai-based Shimao Property Co surged the daily cap of 10 percent to 10.34 yuan (US$1.51) while China Vanke Co, the country's largest developer, added 1.65 percent to 8.60 yuan.
Minsheng Bank, the only listed privately-owned Chinese bank, gained 1.83 percent to 5.56 yuan. Industrial & Commercial Bank of China, the nation's biggest lender, increased 0.21 percent to 4.74 yuan.
Xinjiang Ba Yi Iron & Steel Co, the steel maker controlled by Baosteel Group Corp, hiked 7.13 percent to 8.87 yuan. Bayi said its first-half profit may have jumped more than threefold due to higher metal prices.
Electricity producers were among the gainers this morning after China increased the price of electricity paid to coal-fired producers.
Huaneng Power International Inc, a unit of China's largest power producer by capacity, jumped 3 percent to 6.86 yuan. GD Power Development Co increased 3.55 percent to 6.42 yuan.
China increased the price of electricity paid to coal-fired producers from July 1, according to the National Development and Reform Commission yesterday. Prices in Guangdong Province will increase 2.6 cents per kilowatt-hour, while Beijing prices will increase by 1.03 cents and Shanghai by 2.14 cents.
Beijing Yanjing Brewery Co, China's third-biggest beer maker, advanced 5.14 percent to 16.99 yuan.
Yangjing said it won regulatory approval for a plan to sell as much as 1.8 billion yuan of shares to upgrade production lines and build barley processing plants.
The approval was given by the China Securities Regulatory Commission, Beijing-based Yanjing said in a statement to the Shenzhen Stock Exchange today.
The brewer said in January it plans to sell as many as 86 million shares at 20.95 yuan each to 10 investors through a private placement.
Inner Mongolia Eerduosi Cashmere Products Co jumped 4.65 percent to 16.89 yuan.
The wool producer said first-half profit probably more than doubled because earnings from one of its subsidiaries increased, according to its statement to the Shanghai Stock Exchange yesterday. Net income was 116.7 million yuan in the first half of 2007, it said.
On the losing side, Ping An Insurance (Group) Co, China's second- largest insurer, retreated 4.79 percent to 40.98 yuan after the company said some investors are speculating about a tax investigation.
There has been speculation about what Ping An called "regular investigations conducted by the State Administration of Taxation on the company,'' the company said in a statement to the Hong Kong exchange late yesterday. "The speculation is not in accordance with facts.''
Ping An, based in the southern city of Shenzhen, said the procedural tax audit is ongoing and involves payments between 2004 and 2006.