SHANGHAI stocks inched up today as property developers advanced on rising home prices and financial stocks gained after a state-owned investment company increased its stake in China's four biggest lenders.

The key Shanghai Composite Index added 3.08 points, or 0.14 percent, to 2,159.29. Daily turnover was 63.6 billion yuan (US$10.4 billion).

Data from the National Bureau of Statistics showed home prices in May rose in 65 of the 70 mainland cities monitored on a monthly basis, down from 67 in April and 68 in March.

However, house prices last month recorded the fastest annual gain this year, with average new home prices in 70 major Chinese cities in May increasing 6 percent year on year, up from a two-year high of 4.9 percent in April, according to Reuters calculations based on data released by the bureau.

Poly Real Estate, China's second-largest homebuilder, rose 1.4 percent to 11.12 yuan. Gemdale Corporation increased 2.6 percent to 6.73 yuan. Citychamp Dartong Co jumped 4.5 percent to 8.14 yuan.

BOC International said in a report today that property bellwethers are optimistic thanks to rebounding home sales, favorable half-year earning reports and cheap valuations after sharp falls.

A gauge of leading property developers listed on the domestic exchanges have slumped 11.4 percent over the past month, according to data from Great wisdom Co.

Lenders advanced after the Central Huijin Investment Ltd, a unit of China's sovereign wealth fund, increased its holdings in the country's four biggest banks.

ICBC, the nation's largest lender, added 1 percent to 4.16 yuan. China Construction Bank rose 0.4 percent to 4.65 yuan. Agricultural Bank of China gained 0.7 percent to 2.69 yuan.