China's financial market remained stable and saw brisk trade in the first half of 2007, according to a report published by the People's Bank of China on Tuesday.

Bond circulation rose by 18.25 percent over the same period of 2006 and 3.58 trillion yuan in bonds was issued on the inter-bank bonds market, said the report.

The total included 305.6 billion yuan of book-entry treasury bonds, 2.6 trillion yuan of central bank bills, 482 billion yuan of financial bonds issued by policy banks and commercial banks and 154.78 billion yuan of enterprise short-term finance bills.

The transaction volume of the China interbank lending market totaled 2.9 trillion yuan, up 312.7 percent. Treasury bond repurchases totaled 17.86 trillion yuan, up 67.4 percent.

The stock market rose more than 40 percent in the first half. The benchmark Shanghai Composite Index closed at 3,820.7 points on June 30 from 2,715.72 points at the beginning of 2007, up 40.7 percent.

The major Shanghai Composite Index dropped by 8.26 percent on June 4 which was the largest decline since February 27 when the index dropped by 8.84 percent. In June, the daily turnover on the Shanghai Stock Exchange averaged 171.7 billion yuan, down 49.1 billion yuan over the previous month.