Shanghai's key stock index rose in the morning session today thanks to rising financial shares and airlines after the crude oil price fell in the world market yesterday.

The Shanghai Composite Index climbed 1.85 percent, or 49.67 points, to 2,740.41 at 11:30am.

Gainers in the Shanghai market outnumbered losers 637 to 160 while 19 did not change.

The Shenzhen Composite Index, which tracks the smaller domestic stock exchange, was up 0.98 percent, or 7.76 points, to 798.47.

Air China, the nation's largest carrier by market value, added 2.36 percent to 9.99 yuan (US$1.46). China Southern Airlines, the biggest by fleet size, jumped 1.57 percent to 7.76 yuan while China Eastern Airlines, the third largest by fleet size, sprinted 1.91 percent to 8 yuan.

Oil dropped US$2.81 to US$118.60 a barrel yesterday on speculation demand may be reduced by economic slowdowns in the US and Europe. Oil has lost more than US$28 since touching a record US$147.27 a barrel on July 11.

The declining oil price also buoyed oil refiners. Sinopec, the nation's biggest refiner, increased 1.96 percent to 11.44 yuan while PetroChina, the biggest oil producer and second largest refiner, also added 2.32 percent to 15.02 yuan.

Shares in banking, real estate and securities sectors bounced back from previous losses and climbed higher this morning.

Industrial & Commercial Bank of China, the nation's biggest lender, rose 2.38 percent to 5.17 yuan. Beijing-based developer Financial Street closed 5.66 percent higher to 8.40 yuan. Citic Securities, the nation's largest brokerage by assets, jumped 3.59 percent to 23.06 yuan.

Meanwhile, gold producers continued to fall in the early trading today.

Zijin Mining Group Co, China's largest gold producer, lost 1.79 percent to 6.58 yuan. Zhongjin Gold Corp, the second-largest, retreated 2.17 yuan, or 3.89 percent, to 41.98 yuan.

Gold futures for December delivery fell 2.4 percent to US$886.10 an ounce in New York. Earlier, the price touched US$883.90, the lowest since June 25.