News of the 7.8-magnitude Sichuan earthquake was disseminated half an hour before the China market closed.

The benchmark Shanghai Composite Index yesterday ended up 13.48 points at 3,626, easing from an intraday high of 3,668. The smaller Shenzhen Composite Index rose 1.33 percent, or 14 points, to 1,111.

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Rising stocks in Shanghai outnumbered losers by 636 to 245, while turnover in Shanghai A shares was 116.4 billion yuan (HK$129.69 billion) compared with Friday's 128.5 billion yuan.

Financial shares were mixed with Industrial and Commercial Bank of China (1398), the country's biggest lender, rising 0.33 percent to 6.16 yuan, despite an increase in the reserve requirement ratio that is expected to further limit the sector's lending growth. Property developers, which are most vulnerable to monetary tightening, declined.

Although the benchmark index was down by more than 2 percent when the 8.5 percent high April inflation was announced during morning trading, it regained momentum as the news was digested.

Helping to restore favorable sentiment was a report from state-run Shanghai Securities News citing sources as saying that the China Securities Regulatory Commission had ordered the Shanghai Stock Exchange to strictly monitor the approval of offloading activities of newly tradable shares.

According to the National Business Daily, speculation also ran high that Beijing will ban all refinancing applications prior to the Olympics.