Chinese Shares Mostly Rise; Property Developers Fall on Trial Property Tax Launch

Chinese stocks advanced for a third day Friday with the benchmark Shanghai Composite Index rising 0.13 percent, or 3.6 points, to 2,752.75 points.

The Shenzhen Component Index climbed 0.84 percent, or 98.9 points, to11,894.23 points.

Combined turnover shrank to 162.9 billion yuan (24.75 billion U.S. dollars) from 184.02 billion yuan the previous trading day.

Gainers outnumbered losers 650 to 209 in Shanghai and 862 to 274 in Shenzhen.

The real estate sector fell as investors turned cautious on the sector after China announced the trial launch of its first-ever property tax program late Thursday.

Chinese authorities said they had approved the long-awaited trial of a property tax in the municipalities of Chongqing and Shanghai.

China Vanke Co., the nation's biggest listed property developer, lost 0.48 percent to finish at 8.26 yuan per share.

Poly Real Estate Group Co., China's second-largest developer by market value, dropped 1.21 percent to 13.08 yuan per share.

Analysts think that as the government imposes curbs on the property market, investor confidence in the broader market will rise amid expectations capital will flow out of the property sector and into the stock market.

Auto producers and cement makers led the rise, climbing 1.52 percent and 2.51 percent, respectively.

Shanghai Automotive Industry Corp. (SAIC) jumped 3.65 percent to 17.33 yuan per share while FAW Car Co. rose 4.22 percent to 17.05 yuan per share.

Banks dropped across the board after Zhou Xiaochuan, the central bank governor, said the central bank will continue to use banks' reserve requirement ratios (RRR) to control liquidity.

Zhou said in an exclusive interview with Xinhua Thursday the central bank will continue to rely on RRR hikes and insurance of central bank bills to soak up liquidity, even though the RRR is already at a high level.

The Industrial and Commercial Bank of China (ICBC), the country's largest bank by market value, lost 0.71 percent to finish at 4.21 yuan per share.