Policy outlook helps to boost equity markets

Shanghai - Stocks on the Chinese mainland rose on Monday, erasing the benchmark index's 2011 loss. The advance came on speculation that the government will offer help to smaller businesses and refrain from boosting interest rates amid signs of slumping economic growth.

SAIC Motor Corp and FAW Car Co advanced more than 3 percent, leading gains for automakers, after the official Xinhua News Agency said auto sales growth may recover in the second half. Zijin Mining Group Co jumped the most in nine months, as investors judged the stock inexpensive. A gauge of smaller companies climbed for a third day after Vice-Premier Wang Qishan was cited by Xinhua as urging lenders to increase financing to small companies.

"Recent economic data showed a picture of a weakening economy and expectations about an easing of tightening measures have grown stronger," said Sun Chao, an analyst at CITIC Securities Co in Shanghai. "If we really see concrete signs of that, stocks will rebound."