China expected to move to stimulate economy

Commodities headed higher Monday as expectations rose that the Chinese government will soon move to further stimulate its economy.

The National Development and Reform Commission, China's top economic planner, has approved three large steel construction projects.

July crude on the New York Mercantile Exchange was up 28 cents to $91.14 US a barrel in electronic trading and copper rose two cents to $3.47 US a pound.

China is the world's biggest consumer of the metal, which in turn is largely viewed as an economic barometer because it is used in so many industries.

Bullion also advanced, up $11.40 to $1,571.20 US an ounce. Premier Wen Jiabao pledged last week to encourage pro-growth policies.

Hong Kong's Hang Seng added 0.5 per cent Monday to 18,800.99.

In mainland China, the Shanghai Composite Index climbed 1.2 per cent to 2,361.37 and the smaller Shenzhen Composite Index shot up 1.4 percent to 948.42.

Later in the week, China will release monthly manufacturing data. A private survey last week showed activity weakened further in May.