SHANGHAI: China stocks closed higher on Thursday with banks and the electric vehicle sector leading gains, as investors cheered a better-than-expected retail sales in June while hoping for continued policy support to an economic recovery.

At the close, the Shanghai Composite index was up 1.02% at 3,564.59 and the blue-chip CSI300 index was up 1.35%. Both indexes made the biggest daily gain since June 25. Leading the gains, the banking sector sub-index surged 2.56%, while the new-energy vehicle sector gained 2.09%.

EV battery supplier Ganfeng Lithium rose 5.05%, while Jiangsu Zhangjiagang Rural Commercial Bank added 5.3%.

The consumer staples sector was up 1.81%, the real estate index rose 1.04%, and the healthcare sub-index up 0.71%.

The smaller Shenzhen index ended up 0.35% and the start-up board ChiNext Composite index was higher by 1.398%.