SHANGHAI - Stocks on the Chinese mainland rose for a third day as better-than-estimated US data eased concern the global recovery is faltering.

China Cosco Holdings Co, the world's largest operator of dry-bulk ships, jumped the most in five months. Shanghai East-China Computer Co, a computer products provider, surged by the 10 percent daily limit. China Vanke Co paced declines by developers after the regulators told banks to tighten lending for real estate.

The Shanghai Composite Index added 0.45 percent to 2593.17 at the 3 pm close. Stocks on the index trade at 11.9 times estimated earnings, the lowest since January 2006, according to weekly data compiled by Bloomberg. The CSI 300 Index increased 0.29 percent to 2875.36.

"The stock market has almost priced in negative factors including inflation and the overseas debt crises," said Li Jun, a strategist at Central China Securities Co in Shanghai. "Investors may still be concerned about the global outlook, but there's limited room for further declines in the market."

The Shanghai Composite has dropped 1.3 percent this week, the fourth straight week of declines, amid concern debt crises in Europe and the United States will hurt global economic growth. The gauge has lost 7.7 percent this year, as the central bank raised interest rates five times and ordered lenders to set aside more cash as deposit reserves 12 times since the start of 2010 to contain inflation.

China Cosco jumped 3.02 percent to 7.17 yuan ($1.12), the most since March 4. China Merchants Energy Shipping Co rose 3.58 percent to 3.47 yuan, the most since Jan 21.

Gains by China's currency may fuel imports into the country by supporting purchases of cheaper goods abroad, said SEB Enskilda analyst Nikolaj Kamedula.

Yuan gains

The yuan has risen 0.7 percent this week, more than any weekly increase since December 2007, breaking through 6.4 a dollar for the first time in 17 years. The central bank set the trading band 0.27 percent higher on Thursday, the biggest increase since November.

The Chinese currency may remain strong in the short to medium term, the China Securities Journal said in a front-page commentary on Friday. The central bank may be more cautious on using rate increases as that would add to capital inflow pressures, the commentary said. China will continue its monetary tightening against inflation, according to the commentary.

US data

Futures on the Standard & Poor's 500 Index slid 0.9 percent on Friday. The gauge surged 4.6 percent on Thursday, rebounding from the previous day's 4.4 percent drop. Claims for US unemployment benefits dropped to the lowest level since April, a government report showed.

A gauge of technology companies in the CSI 300 added 2.2 percent, the most among industry groups. Shanghai East-China Computer jumped 10 percent to 20.34 yuan. Neusoft Corp, a software maker, jumped 6.97 percent to 10.74 yuan.

The China Banking Regulatory Commission has told the nation's banks to tighten lending for real estate as the effects of government property curbs may start to increase in the next three to five months, a person familiar with the matter said.

China Vanke, the country's largest property developer by market value, had 171 billion yuan of unsold houses as of June 30, up 28.5 percent from three months earlier, the company's report showed. China Vanke lost 1.40 percent to 8.43 yuan. Poly Real Estate Group Co declined 1.96 percent to 10.98 yuan.

Bloomberg News