The mainland stocks rose, led by financial companies, after Vice-Premier Li Keqiang reiterated the government won`t tighten lending conditions and China Business News said real estate investment trusts may be permitted.

"Li`s comments reassured the market," Li Shaoming, a Beijing-based property analyst at China Jianyin Investment Securities Co, said. "The introduction of real estate investment trusts will provide property companies with another financing avenue."

The Shanghai Composite Index gained 34.1, or 1.2 percent, to 2810.12 at the close, reversing an earlier drop of 1.2 percent.

Stocks traded on the measure are valued at 28.22 times earnings, more than double the 12.9 times they fetched at their low in November.

Poly Real Estate, the nation`s second-largest developer by market value, advanced 8.2 percent to 25.52 yuan. China Vanke Co, the biggest developer, surged 9.7 percent to 11.88 yuan, the biggest advance since Sept 26. Gemdale, the fourth largest by market value, gained 8.2 percent to 14.57 yuan. A measure of property stocks on the Shanghai Composite climbed 6.6 percent, the most since March 17.

Industrial and Commercial Bank of China, the nation`s biggest listed lender, added 1.4 percent to 4.94 yuan, erasing an earlier loss of 1.9 percent. China Minsheng Banking Corp, the nation`s first privately owned bank, advanced 2.3 percent to 7.74 yuan.

Zhongjin Gold Corp, the country`s second-largest gold producer by market value, rose 6.9 percent to 50.62 yuan.

Shandong Gold Mining Co, the No 3, gained 2.5 percent to 54.65 yuan. Gold rallied the most in more than a week yesterday as the dollar weakened, increasing demand for the metal as an alternative investment.

Hang Seng falls

Hong Kong stocks fell for a third day as commodity producers declined on lower prices for metals and oil.

The Hang Seng Index retreated 80.90, or 0.5 percent, to close at 18084.60, adding to a two-day, 3.8 percent drop. The measure climbed as much as 0.5 percent in the afternoon session led by Industrial and Commercial Bank of China Ltd, after the nation`s biggest lender agreed to provide financing for power plants and an oil pipeline in Uganda.

The Hang Seng China Enterprises Index declined 0.2 percent to 10700.15.

Bloomberg News