Chinese mainland's stocks rose to a record close for a fifth day. Lenders gained after Industrial Bank Co reported a leap in profit for 2006, Bloomberg said today.

"It's evidence that the banking industry is still one of the most profitable sectors among listed companies," said Yan Ji, an investment manager at HSBC Jintrust Fund Management Co in Shanghai, which looks after about US$517 million of assets. "We may see banking stocks rise further."

The Shanghai and Shenzhen Composite Index, which tracks yuan-denominated A shares listed on domestic two exchanges, gained 13.63, or 0.5 percent, to 2,797.65 at the close. It earlier slid as much as 3.4 percent.

The index has climbed about 14 percent since it plunged a record 9.2 percent on February 27, fueled by speculation that booming mutual-fund sales will drive share prices higher.

Industrial Bank, a Chinese lender in which HSBC Holdings Plc has a stake, rose 0.78 yuan, or 3.1 percent, to 25.97 yuan. The lender said 2006 profit soared 54 percent from a year earlier to 3.8 billion yuan (US$491 million) because the nation's economic growth led to increased borrowing and reduced bad loans.

Industrial & Commercial Bank of China, the nation's largest, added 0.14 yuan, or 2.7 percent, to 5.30 yuan. Bank of China, the second largest, climbed 0.15 yuan, or 2.9 percent, to 5.33 yuan. China Merchants Bank, the sixth-largest, gained 0.74 yuan, or 4.5 percent, to 17.20 yuan.

Equities earlier fell as some investors judged recent gains excessive. Daqin Railway Co, the operator of China's biggest coal transport network, today slumped 0.42 yuan, or 3.1 percent, to 12.99 yuan. The shares have jumped 60 percent this year. Wuliangye Yibin Co, the nation's biggest spirits maker, lost 0.60 yuan, or 2.2 percent, to 26.25 yuan. Shanghai Automotive Co, the listed unit of China's largest automaker, declined 0.41 yuan, or 3 percent, to 13.16 yuan.

"Current valuations are still a concern to investors with the market at a record," said Yan at HSBC Jintrust.

The benchmark is valued at about 36 times earnings, the highest in the Asia-Pacific region, according to data compiled by Bloomberg.

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 1.1 percent to 3,173.02. The Shenzhen Composite Index, which covers the smaller one, dropped 0.7 percent to 835.75.

Editor: Yan