SHANGHAI'S key stock index rose in the morning session on news of central government's plan to boost economic development in the southwest region.

The benchmark Shanghai Composite Index added 1.31 percent, or 34.14 points, to close at 2,640.84 points. Turnover expanded to 63.7 billion yuan (US$ 9.38 billion) from last Friday morning's 42 billion yuan.

The Shenzhen Composite Index, which tracks the smaller domestic market, grew 1.55 percent to close at 1,119.88 points.

Stocks related to Guangxi Zhuang Autonomous Region led the gainers as media reports said that the central government may invest as much as 1.5 trillion yuan in the next five years to improve the region's infrastructure.

Guangxi Guiguan Electric Power Co jumped by daily limit of 10 percent to 5.29 yuan. Guangxi Wuzhou Communications Co soared 10 percent to 8.31 yuan. Guangxi Liugong Machinery grew 3.15 percent to 23.91 yuan.

Banks rose after Agricultural Bank of China exercised an over-allotment option in Shanghai to raise US$ 22.1 billion yuan in the world's largest initial public offering. Its stocks added 0.74 percent to 2.71 yuan. China Merchants Bank grew 1.17 percent to 13.88 yuan. Bank of China added 0.29 percent to 3.45 yuan.

Property developers went mixed on news that the central government has conducted investigation on developers' regulation compliance, and ordered banks to offer lending according to developers' credit.

China Vanke dipped 0.57 percent to 8.79 yuan. China Merchants Property Development Co grew 2.56 percent to 10.82 yuan. Gemdale Corp edged down 0.14 percent to 6.95 yuan.