Stocks in the region inched to fresh seven-week highs yesterday, with Shanghai developers leading the way on optimism that Beijing will not take further action to cool the property market.

After Monday's 1.9 per cent jump, gains for the FTSE Asia-Pacific index were more measured amid a subdued tone for trading, advancing just 0.1 per cent to 224.24, the index's highest level since January 21.

The Shanghai Composite rose 0.5 per cent to 3,069.14 to record the biggest advance yesterday among the leading regional indices.

“Fears that the government will impose harsh property measures seem overstated,” said Zhang Xiuqi, of China International Fund management. “Developers are cheap at this level.”

Property stocks have lost 6.4 per cent on the Shanghai benchmark this year but were boosted 2.3 per cent yesterday after Su Ning, deputy governor of the People's Bank of China, the central bank, said action already taken to calm overheating in real estate had been effective.

Poly Real Estate, the nation's second-largest developer by market value, climbed 4.4 per cent to Rmb20.28 after stating that its sales had risen 41 per cent in the first two months of the year.

Also benefiting was China Vanke, the country's second-biggest, which added 2.5 per cent to Rmb9.62, while Gemdale, the number four, was the second-most actively traded stock on the index, surging 6.9 per cent to Rmb13.77. Gemdale said after the market closed that its 2009 net income rose 111 per cent to Rmb1.78bn.

China Life, the world's biggest life insurer by market value, gained 3.3 per cent to Rmb28.09 after raising its 2009 net profit growth forecast to more than 200 per cent, citing accounting rule changes.

Chongqing Changan Automobile climbed 4.9 per cent to Rmb13.26 after reporting that its net profit rose to Rmb1.1bn, more than 43 times the previous year's figure.

The most actively traded stock on the Shanghai index was China Southern Airlines, the nation's biggest carrier by fleet size.

Its shares gained 3.5 per cent to Rmb6.85, its highest level for seven months, as they resumed trading for the first time since February 22 after the announcement of a share sale aimed at raising as much as Rmb10.75bn.

China Southern's Hong Kong-listed shares also surged, hitting a 21-month intraday high before easing back to a gain of 7.1 per cent to HK$3.19.

The Hang Seng index advanced 0.1 per cent to 21,207.55, its third day of gains, with China Life's Hong Kong-listed shares the most actively traded stock, rising 3 per cent to HK$36.25.