SHANGHAI stocks rallied this morning from their sharpest fall in 19 months yesterday as surging financial shares offset the decline of property developers.

The key Shanghai Composite Index rose 1.1 percent to 2,298.52 points by midday with a turnover of 57 billion yuan (US$9.2 billion) by the noon break.

China set its economic growth at 7.5 percent for 2013, Premier Wen Jiabao said this morning ahead of the opening session of the Chinese National People's Congress.

The world's second-largest economy expanded 7.8 percent last year, the slowest pace in 13 years but above the target set at the beginning of the year.

Lenders gained among financials after China's banking regulator allowed more banks to set up fund companies on a trial basis.

Industrial Bank Co surged 5.3 percent to 19.32 yuan. Shanghai Pudong Development Bank Co increased 3.9 percent to 10.79 yuan. China Merchants Bank Co leaped 4.2 percent to 12.78 yuan.

Property developers continued a weak run on the central government's new home curbs. Poly Real Estate, China second-largest developer, declined 2.6 percent to 11.07 yuan. Gemdale Corporation lost 3 percent to 6.23 yuan.

China will step up control on the property market and promote the supply of affordable housing in a bid to curb speculative demand and stabilize home prices, Wen said today.