China shares rebound after Wall Street rise

SHANGHAI -- Chinese shares rebounded Thursday after mild gains on Wall Street, but doubt over the direction of government policies lingered.

The benchmark Shanghai Composite Index edged up 6.9 points, or 0.3 percent, to close at 2,603.48. The Shenzhen Composite Index for China's smaller second exchange added 0.7 percent to 1,119.00.

The benchmark clawed back some of its recent losses in thin trading volume, but uncertainty remained over whether the government will relax tight credit polices as growth slows, analysts said.

"The market fluctuated and the confidence was weak, because it was still unclear which direction the government policies will head," said Chen Jinren, an analyst for Huatai Securities in the eastern city of Nanjing.

Resource shares were heartened after Premier Wen Jiabao called for accelerating consolidation of coal-mining companies. Yanzhou Coal Mining Co. jumped 1.3 percent to 17.89 yuan, while China Shenhua Energy Ltd., the country's biggest coal producer, gained 0.5 percent to 23.91 yuan.

Jiangxi Copper Ltd., China's largest metal producer, climbed by 2.1 percent to 29.09 yuan on higher earnings, while Aluminum Corp. of China, or Chinalco, added 0.5 percent to 10.05 yuan.

China Life Insurance Co., the country's biggest life insurer, sank 3.2 percent to 22.51 yuan as profits were weaker-than-expected, while China Pacific Insurance. slipped 1 percent o 23.99 yuan.

In currency markets, the yuan weakened to 6.7991 to the U.S. dollar from Wednesday's close of 6.7983.

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Associated Press researcher Bonnie Cao in Beijing contributed to this report.