SHANGHAI - Stocks on the Chinese mainland rebounded from a more than one-year low on speculation the government may delay interest-rate increases after Premier Wen Jiabao urged global cooperation to stabilize financial markets.

Industrial & Commercial Bank of China Ltd (ICBC) paced gains by lenders. PetroChina Co led commodity producers higher as crude and metal prices rallied after the US Federal Reserve vowed to keep borrowing costs near zero.

The Shanghai Composite Index climbed 0.91 percent on Wednesday, to 2549.18 at the 3 pm close. On Tuesday, the gauge closed at a level that was 20 percent lower than a November high. The measure trades at 11.7 times estimated earnings, a record-low, according to weekly data compiled by Bloomberg.

"We're unlikely to see another interest rate rise this year as inflation is about to peak and the global economy is fragile," said Wu Kan, a Shanghai-based fund manager at Dazhong Insurance Co, which oversees $285 million. "The A-share market is at a bottom and the valuations for companies such as developers and consumer retailers are low."

The CSI 300 Index advanced 0.93 percent to 2824.12, paring its loss this year to 9.7 percent.

China's State Council said "relevant nations" should adopt responsible fiscal and monetary policies to maintain investor confidence, according to a statement on Tuesday after a meeting chaired by Premier Wen.

Borrowing costs

The State Council's statement dropped previous language describing the fight against inflation as the nation's top priority and policymakers are probably in a "wait-and-see mode", Lu Ting, a Hong Kong-based economist at Bank of America Merrill Lynch, wrote in an email.

The People's Bank of China will leave borrowing costs unchanged for the rest of this year, according to eight out of 10 analysts surveyed on Tuesday.

ICBC advanced 1.22 percent to 4.15 yuan (64 cents). Bank of China Ltd added 0.34 percent to 2.95 yuan. China Vanke Co climbed 1.69 percent to 8.44 yuan.

The central bank has 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 price rises.

Consumer prices are in a "controllable range", the National Development and Reform Commission said. Government measures to slow inflation have had preliminary effects, it said.

Faster inflation

Consumer prices climbed 6.5 percent in July from a year earlier, the fastest pace since 2008, a report from the Beijing-based National Bureau of Statistics showed on Tuesday. That was more than the 6.4 percent median estimate in a Bloomberg News survey. A slower-than-estimated 14 percent gain in industrial production added to signs that moderating economic growth may assist in limiting price pressures.

Bloomberg News