China stocks closed 0.5 percent higher on Thursday after Beijing vowed to protect investors' interests while it pushes a landmark plan to float state shares. The benchmark Shanghai composite index closed at 1,172.475 points after gaining 1.5 percent on Wednesday, when Beijing took the decisive and long-awaited step of throwing open its programme of state-share reform to all 1,400 listed firms.
"The market is studying the news but investors basically have agreed that it's positive for the market," said Peng Yong, a Beijing-based analyst at ABN Amro Xiangcai Fund Management Co Banking shares pushed higher on strong first-half earnings, analysts said.
Huaxia Bank Co Ltd, one of just five listed lenders, jumped nearly 2 percent to 4.14 yuan on stronger second-quarter earnings and news it was expected to introduce Deutsche Bank as a foreign investor, dealers said.
Pudong Development Bank also gained 0.6 percent to 8.52 yuan on news Citigroup intended to increase its stake to 20 percent.
Sinopec Corp, the region's top oil refiner, also edged up 0.22 percent to 4.61 yuan.
On Wednesday, China threw open a plan to float state holdings in excess of $200 billion to all listed companies, taking a decisive step to remove a decade-old market overhang that has depressed stocks.
Regulators said on Thursday that listed companies must not harm the interests of local or foreign investors if they choose to join the programme, and the government would make market stability a condition for pushing forward the reform.
Fears of an impending flood of shares have helped drive the market to eight-year lows in past months, though the key index had shown signs of recovery over the past five weeks.
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