China shares rally on positive sentiment

Chinese shares closed higher on Friday as the central bank governor provided words of support to the country's stock market and February lending data came in better than expected.

The benchmark Shanghai Composite Index gained 0.70 percent to finish at 3,372.91 points. The Shenzhen Component Index went up 0.67 percent to close at 11,713.61 points.

China's central bank governor Zhou Xiaochuan said at a press conference on Thursday that there is a view that credit capital should not flow into the stock market, arguing that it is not supporting the real economic activities, he did not agree with the view.

"In China, businesses from many industries are getting financed through the stock market," Zhou said. But he also warned there are some financial market speculations unrelated to the real economy.

China's new yuan-denominated lending in February hit 1.02 trillion yuan (166.7 billion U.S. dollars), up 376.8 billion yuan from one year earlier, official data showed.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 12.5 percent year on year at the end of February, higher than January's 10.8 percent.

Shares related to shipping, Internet security, software and online education were big gainers on the market.

Coal firms rallied, with Yanzhou Coal Mining Company rising by the daily limit of 10 percent, and Anyuan Coal Industry Group closing 9.95 percent higher.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, rose 2.52 percent to close at a new high of 2,069.07 points.