Modest gain for stocks after low start

Stock markets in the Chinese mainland started low Monday, but eventually finished higher than Friday's close, with the main Shanghai and Shenzhen indices up by 0.61 percent and 0.26 percent respectively.

The Shanghai Composite Index added 12.11 points to close at 2,004.76, while the Shenzhen Component Index increased 20.24 points to 7,684.23.

The total trading volume of the two exchanges reached 164.7 billion yuan ($26.81 billion), down 42.4 billion yuan on Friday's trading.

Shanghai-traded banking stocks fell by 0.5 percent, with Bank of Communications Ltd and China CITIC Bank leading the downward trend, each dipping more than 1 percent.

The People's Bank of China (PBC), the country's central bank, announced after trade closed Friday that it was relaxing loan interest rate rules for China's banks. Analysts said this chilled investor sentiment towards banking stocks. The majority of Chinese bank profits come from their net interest margins, which is the difference between the lending rate and the deposit rate.

However, other market participants interpreted the PBC's decision as positive for small and medium enterprises in the IT, bio-science and telecom sectors. The ChiNext board, a platform for small and medium enterprise stock trading in Shenzhen, gained 3.38 percent Monday.

Oil refining and mining sectors helped boost markets.