Nov. 3 (Bloomberg) -- China's stocks rose, led by financial companies, after the state news agency said the central bank removed temporary controls over loans.

Shanghai Pudong Development Bank Co., the Chinese partner of Citigroup Inc., advanced 3.7 percent. Industrial & Commercial Bank of China Ltd., the nation's biggest listed lender, gained 2.5 percent. China Vanke Co., the nation's biggest listed property developer, added 1.5 percent. The central bank removed the controls to maintain ``relatively fast'' economic growth and counter the financial crisis, Xinhua News Agency said Nov. 1.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, gained 15.05, or 0.9 percent, to 1,678.71 at the 11:30 a.m. local-time break. The gauge fell as much as 1.2 percent earlier, led by industrial companies including Daqin Railway Co. and Changsha Zoomlion Heavy Industry Science & Technology Development Co.

``Banking stocks got a lift from the specific news'' about loan controls, said Zhang Ling, who manages the equivalent of $1.1 billion at ICBC Credit Suisse Asset Management Co. in Beijing. ``But there isn't any buying opportunity in the market yet, as the worst for the domestic economy and corporate earnings is yet to come.''

The CSI 300 has slumped 69 percent this year, making it Asia's worst-performing benchmark index. Stocks have fallen amid concern demand for Chinese products will decline as the global credit crisis drags the world's largest economies into recession.

Pudong, ICBC

Pudong Bank climbed 3.7 percent to 12.17 yuan. Industrial & Commercial Bank of China rose 2.5 percent to 3.71 yuan. China Construction Bank Corp., the country's second-largest bank, climbed 2.6 percent to 3.93 yuan.

Vanke gained 1.5 percent to 5.97 yuan. COFCO Property (Group) Co., the property unit of the country's biggest grain trader, advanced 4.7 percent to 4.95 yuan.

The People's Bank of China will closely monitor global financial turmoil and will use a combination of macro-economic policies to boost domestic demand, Xinhua quoted Li Chao, the central bank's spokesman, as saying. China has the ``full ability'' to counter the financial crisis, Li said, according to Xinhua.

China's manufacturing contracted as the worst financial crisis since the Great Depression eroded export demand. The Purchasing Managers' Index fell to a seasonally adjusted 44.6 last month from 51.2 in September, the China Federation of Logistics and Purchasing said on Nov. 1. That was the lowest since the gauge was launched in July 2005. A reading below 50 reflects a contraction, above 50 an expansion.

Net Income

Net income at the 487 companies listed on the Shenzhen Stock Exchange's main board rose 3.4 percent in the first three quarters, a fraction of the 89 percent increase a year earlier, according to data in a statement released by the bourse today.

China's economy grew at the slowest pace in five years in the three months through September as export orders shrank and industrial production waned. The expansion cooled for a fifth straight quarter, to a 9 percent gain from a year earlier.

Daqin Railway, the operator of China's biggest coal transport network, slid 6.9 percent to 9.01 yuan. Zoomlion Heavy Industry, China's second-biggest maker of concrete-handling machinery, fell 1.7 percent to 9.45 yuan. Air China Ltd., the nation's largest international carrier, lost 2.6 percent to 3.43 yuan.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 0.8 percent to 1,742.59. The Shenzhen Composite Index added 0.2 percent to 471.85.

The following companies were among the most active in China's markets. Stock symbols are in brackets after companies' names.

Guangxi Liugong Machinery Co. (000528 CH), the manufacturer of construction equipment, dropped 0.12 yuan, or 1.4 percent, to 8.70 yuan. The company's stock rating was cut to ``neutral'' from ``buy'' and its price target reduced by 64 percent to 8.70 yuan at Goldman Sachs Group Inc.

Haitong Securities Co. (600837 CH), the country's largest listed brokerage by market value, slumped 1.44 yuan, or 7.8 percent, to 17, extending a decline of 7.8 percent a day earlier. About 3.52 billion shares will begin trading on the stock market from Nov. 21 through the year end after the expiry of lock-up periods, representing 15 times its 234 million shares outstanding, according to Ping An Securities Co.

Shanghai Zhenhua Port Machinery Co. (600320 CH), the world's biggest maker of quayside cranes, added 0.05 yuan, or 0.8 percent, to 6.75 yuan. Zhenhua will book a 517 million yuan ($76 million) foreign exchange gain as profit next year, it said in a filing to Shanghai's stock exchange on Nov. 1. The gain represents 26 percent of the company's 2007 profit, it said.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

Last Updated: November 2, 2008 23:42 EST