China's shares closed up 0.3 percent on Monday, helped by technical buying among large-caps such as Sinopec Corp and Merchants Bank Co Ltd after four straight days of losses. The benchmark Shanghai composite index climbed to 1,231.046 points after having shed 5 percent over the past week because an annual parliament session failed to deliver concrete policies to lift markets bogged down near six-year lows. "Some investors built positions, though cautiously, as it seemed the key index had reached its bottom," said analyst Chen Huiqin at Huatai Securities.
Analysts said sentiment was weak despite Monday's modest rise.
"The index will probably linger near the psychologically important 1,200 level. Investors dare not plunge into markets right after steep falls," said Shi Honglin at Qinghai Securities.
Petroleum and financial companies were among the biggest index drivers on Monday, according to Reuters Research.
Top Asian oil refiner Sinopec Corp finished 1 percent higher at 4.20 yuan after sliding 5.5 percent in the previous four days, underperforming the market.
Top listed lender Merchants Bank gained 0.7 percent to 8.51 yuan after the central bank granted commercial lenders more leeway in setting mortgage rates last week.
The new move may benefit commercial lenders in the sense they could earn higher interest income off housing loans.
But Changhong Electric Appliance Co Ltd- the largest TV maker in term of domestic unit sales - slumped 5.3 percent to 3.55 yuan.
The firm, which had earmarked some $310 million to cover debts owed by US distributor Apex, said over the weekend it expected to post a $447 million loss for 2004.
The key index is down 2.8 percent so far in 2005 after having slumped 15 percent in 2004 to become Asia's worst performing market that year, when it was hammered by Beijing's economic cooling steps as well as corporate scandals.
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