Chinese shares closed slightly higher in the morning session on Tuesday, with the benchmark Shanghai Composite Index up 0.62 percent.

The key Shanghai index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, climbed 23.74 points to finish at 3,845.65 points. The Shenzhen Component Index on China's smaller Shenzhen Stock Exchange rose 1.66 percent, or 204.4 points, to 12,535.59 points.

Real estate companies and banks are the leading stocks boosting the market in the morning session. Petrochemical, 3G (third generation mobile communication) and telecom sectors are also among the driving forces.

The two bourses have 11 shares rising to the daily limit of 10 percent, but most of the stocks are on the downward trend.

The combined turnover of the two bourses stood at 61 billion yuan (US$ 8 billion). The daily turnover on Monday was 91.5 billion yuan (US$ 12.1 billion), much lower than the average daily level of 200 billion yuan in May.

Analysts expected the market to be more active as more than two trillion yuan (US$ 263.1 billion) frozen for buying four new stocks went free on Tuesday.

More money is expected to go to the domestic stock market as the ceiling of investment by China's insurers in stocks will most likely be raised from the current five percent to 10 percent of their gross assets.

Investors showed less enthusiasm in Chinese stock market since the government raised the stamp tax for stock trading on May 29.

Chinese economist Wu Xiaoqiu with the People's University of China suggested the tax be charged unilaterally to restore the confidence of the market.

(Xinhua News Agency July 17 2007)