SHANGHAI: Shanghai stocks closed up on Tuesday as risk appetite got a lift on the prospect that China will lower corporate funding costs and aid small firms, while real-estate shares recouped losses after banks were told to issue more loans for property projects.

The blue-chip CSI300 index was flat at 4,913.35, while the Shanghai Composite Index gained 0.2% to 3,589.09 points.

The central bank will deepen interest rate reforms and improve rate transmission to further lower financing costs, Zou Lan, head of financial markets at the People’s Bank of China (PBOC) told a briefing.

His comments come a day after Premier Li Keqiang said authorities needed to avoid a “one-size-fits-all” approach to shoring up economic growth.

Zou said on Monday the PBOC would guide financial institutions to step up lending to the manufacturing sector, small firms and green sectors. “Facing with new downward pressures for growth, the PBoC seems to be prepared to increase easing bias if necessary,” Mizuho analysts said in a note.

Real-estate developers rose 1% from a 4% slump in the previous session, after Reuters reported that some Chinese banks had been told by financial regulators to issue more loans to property firms for project development.