Sector Snap: Chinese ETFs Follow China Market Jump

NEW YORK (AP) — Shares of exchange-traded funds that follow Chinese assets rose Thursday following a nearly 5 percent jump in the China's benchmark index on the reassuring news that strong bank lending continued last month.

Exchange-traded funds, or ETFs, are securities that track an index or a basket of assets, like an index fund, but are traded like a stock.

In China, the benchmark Shanghai Composite Index on Thursday gained 130.05 points, or 4.8 percent, to close at 2,845.02. The Shenzhen Composite Index for China's smaller second exchange added 5.5 percent to 956.69.

The big rally came as a state-run newspaper story said new lending by China's four biggest state-run banks totaled 160 billion yuan ($23.5 billion) in August, higher than market expectations. That's only slightly lower than the 165 billion yuan worth of loans they issued in July.

The Shanghai index dropped 6.7 percent on Monday, its steepest fall this year, as investors worried about media reports of a drastic drop in lending. Chinese shares had risen more than 80 percent in 2009 until worries started in mid-August that tighter credit might stifle liquidity. The monthslong rally coincided with an unprecedented flood of bank lending aimed at fighting off the economic downturn.