BEIJING - China's stocks rallied Monday on speculation that the government is taking steps to ease a credit crunch after the nation's new lending in December beat market estimates.

The benchmark Shanghai Composite Index gained by 2.89 percent, or 62.39 points, to close at 2,225.89 points, which marked its biggest advance in almost three months.

The Shenzhen Component Index climbed 3.61 percent, or 311.67 points, to finish at 8,946.09.

Combined turnover rose to 115.56 billion yuan ($18.34 billion) from 76.9 billion yuan the previous trading day.

Gainers outnumbered losers by 934 to 8 in Shanghai, and by 1,370 to 15 in Shenzhen.

The country's banks lent 640.5 billion yuan in new yuan-denominated loans in December, representing a sharp rise from 562.2 billion yuan in November, the People's Bank of China said Sunday.

December's new yuan loans exceeded the market estimate of 600 billion yuan.

In addition to last month's stronger-than-expected money supply, sentiment also got a lift after Premier Wen Jiabao called for measures to boost confidence in the country's stock market.

Energy shares led the rises Monday with 13 coal producers and five non-ferrous metals miners rising by the 10-percent daily limit.

China Shenhua Energy Co, the nation's largest coal producer, rose to 26.01 yuan per share. Nanjing Yunhai Special Metals Co. climbed to 10.52 yuan.

Bank and property shares also rallied. China Vanke Co, the country's largest property developer by market value, increased 3.49 percent to close at 7.41 yuan per share, while Industrial and Commercial Bank of China rose 0.7 percent to 4.31 yuan.