The Shanghai Composite Index closed up 0.5% at 2,118.27 on Tuesday. It comes after speculation that regulators are planning new economic stimulus for the second half of the year.
Premier Wen Jiabo had mentioned last week a loosening of the monetary policy is probable. No specific action or initiative was released though.
New stimulus plans targeting several Chinese cities are being initiated. These include a $240 billion industrial investment in Chongqing. The lack of an official economic stimulus plan from the central government has some investor concerned that the economic slowdown in China could be getting worse.