China shares up, extending gains on stimulus plan

Chinese shares eked out modest gains Wednesday despite a weak region as construction sector stocks continued to rally on the government's $564 billion stimulus package. Financials also rose.

The benchmark Shanghai Composite Index rose 0.8 percent, or 15.5 points, to close at 1859.11. The Shenzhen Composite Index for China's smaller second exchange climbed 1.5 percent to 501.76. The Shanghai benchmark has tumbled 70 percent since it peaked last October.

"Individual stocks were very active today, which reflected a new round of recovery," said Guosen Securities analyst Tang Xiaosheng.

"Investors accept the Chinese economy is slowing, but have raised their estimate of the value of stocks after the stimulus package. Stocks of different categories are seizing the opportunities to rebound in turns as they fell too much in previous sessions."

Cement producers surged for the sixth day on expectations the industry will benefit from stimulus-package spending on construction of airports, highways and other government projects.

Fujian Cement Inc. and Hebei Taihang Cement Ltd. both advanced the maximum daily limit of 10 percent. Fujian Cement finished at 4.16 yuan and Taihang at 4.2 yuan.

Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, rose 0.5 percent to 3.94 yuan. Bank of China Ltd. gained 0.3 percent to 3.25 yuan, and midsize lender, Pudong Development Bank Ltd. jumped 2.6 percent to 14.18 yuan.

Citic Securities Ltd. jumped 4.3 percent to 19.49 yuan, and Hong Yuan Securities Ltd. surged 9.3 percent to 12.04 yuan.

Heavyweight PetroChina Ltd., Asia's biggest oil producer, faded 0.3 percent to 10.96 yuan, after the price of crude tumbled below $60 per barrel on the New York Mercantile Exchange.

On currency markets, China's yuan weakened to 6.8287 to the U.S. dollar in over-the-counter trading on Wednesday afternoon, down from Tuesday's close of 6.8251.