Shanghai stocks edged up yesterday, after tumbling the most in almost a month, despite renewed worries over the European debt crisis.

The Shanghai Composite Index gained 0.01 percent to 2,388.83 after erasing a 1.44 percent loss in early trading.

Financial and real estate counters rallied in the afternoon.

Banks rose on hopes of monetary easing. China Construction Bank gained 0.8 percent to 4.77 yuan (76 US cents), and the Agricultural Bank of China rose 1.1 percent to 2.74 yuan.

Property firms got a lift as the Ministry of Housing and Urban-Rural Development was reportedly working on policies to favor eligible home buyers. Gemdale Corp rose 1.8 percent to 6.21 yuan. Poly Real Estate Group added 0.1 percent to 12.01 yuan.

Shippers fell as Europe, China's second-largest trading partner, is facing a looming backlash against austerity policies to cure its debt crisis.

China Shipping Container Lines Co sank 3.4 percent to close at 3.10 yuan.