Chinese shares rally in anticipation of property stimulus

BEIJING -- China's stocks advanced substantially on Thursday after dipping for two consecutive days as investors expected more favorable policies to support the oversupplied property sector.

The benchmark Shanghai Composite Index rose 1.36 percent to close at 3,617.06 points, and the smaller Shenzhen index gained 2.65 percent to finish at 12,609.84 points.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, surged 4.12 percent to end at 2,770.75 points.

However, total turnover on the two bourses narrowed to 859.8 billion yuan ($135.4 billion) from 943.1 billion yuan the previous trading day, indicating that investors remained cautious.

More than 150 stocks rose by the 10-percent daily limit on Thursday. Furniture producers led the bullish performance with an average growth of 5.37 percent.

The rally came after Chinese leaders called for measures to reduce the inventory of unsold homes and stressed the importance of the property sector to the world's second-largest economy.

President Xi Jinping urged more efforts to address the oversupply problem, when he presided over a meeting of the Central Leading Group for Financial and Economic Affairs last week.

Earlier this month, Premier Li Keqiang told a cabinet meeting that the government should overhaul China's household registration system in a bid to encourage more rural residents to settle in cities to boost consumption of homes and electronic appliances.

"I expect the government to roll out more measures to encourage home purchases," said Yang Hongxu, deputy head of property market researcher E-house China R&D Institute.