China shares rise on lending-fueled liquidity

Chinese shares rose again Monday on lending-fueled liquidity increases, led by resources, steel and banking stocks.

The benchmark Shanghai Composite Index climbed by 77.18 points, or 2.4 percent, to 3266.92, the fourth time in a week the market has set a new 13-month high. The Shenzhen Composite Index for China's smaller second exchange rose 1.8 percent to 1104.19.

The surge has been buoyed by record growth in bank lending to support the government's stimulus plan, some of which is believed to have flowed into the stock market. Officials have pledged to maintain easy credit to support a recovery.

"The enormous amount of lending money certainly needs a releasing outlet," said Wen Lijun, an analyst for Nanjing Securities. "The latest frequent trading and changing hands are accelerating the rally."

Optimism about the economy and rising commodity prices helped to boost resources shares, which benefit from overall economic growth.

China Shenhua Energy Co., the country's biggest coal producer, soared 5.4 percent to 36.17 yuan, while Yanzhou Coal Mining Co. advanced by the daily 10 percent limit to 20.03 yuan.

Aluminum Corp. of China, or Chinalco, and Jiangxi Copper Co. both surged the daily maximum of 10 percent -- Chinalco to 16.57 yuan and Jiangxi Copper to 43.9 yuan.

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