China stocks end up 0.4 pct, property, banks rebound

SHANGHAI May 10 (Reuters) - China's key stock index closed up 0.4 percent on Monday after a see-saw session that plumbed a fresh eight-month low, with China posting an unexpected trade surplus and markets reassured by a rescue package to contain the fallout from the Greek debt crisis.

The Shanghai Composite Index .SSEC ended the day at 2,698.8 points, starting the week in positive territory after posting its worst week of the year last week, when it took its cues from overseas markets that slumped due to fears of a European debt crisis.

Analysts said news of China's unexpected trade surplus for April bolstered the market, which had been hobbled by worries about the outlook for exports, although concerns over deepening inflation and a lack of clarity on policy tightening measures weighed on shares.

Economists had expected a second straight monthly trade deficit, although exports narrowly topped imports. [ID:nTOE649026]

"The market is still wary about coming policy measures and how they will affect China's economy," said Zhang Weigang, analyst at Shanghai Securities.

"The positive response to the European package is having a spillover effect," Zhang said.

Banks and property companies were the leading gainers, with the property index .SSEP up 2.1 percent.

The Shanghai composite's 14-day relative strength index rose to 22 by the close from Friday's 21, after slipping to its lowest since the Lehman Brothers crisis in late 2008. It remained well below the 30 level that indicates a market has become oversold.

Losing Shanghai stocks outnumbered gainers by 466 to 413, while turnover fell to 95 billion yuan ($13.92 billion) from Friday's 108 billion yuan. ($1=6.825 Yuan) (Reporting by Farah Master; Editing by Edmund Klamann)