THE Shanghai Composite Index snapped out of a six-day decline on loosened domestic credit and improved US economic data.

The key index rose to 2,181.22 points by 0.01 percent in the morning. The media and entertainment sector led the rise.

Money-market rates declined for the third week, indicating the central bank is gradually easing monetary policies.

Shenzhen banks followed the example of banks in Beijing and Shanghai and cut mortgage lending rates for first-home buyers, said Securities Times.

However, Xiao Gang, chairman of Bank of China said in a commentary published today that European banks could withdraw credit from Asian markets due to its debt crisis.

He also urged Chinese policy makers to be alert of these changes and further ease monetary policies.

The drop in US jobless claims to a three-year low came unexpected and eased worries about the impact of the European debt crisis on the global economy.

The media and entertainment sector rose by 1.02 percent, leading the market's slight improvement in the morning.

Source:shanghaidaily