BEIJING, Feb. 26 -- All four major Chinese banks told Xinhua on Wednesday no changes had been made to their property loan policies, helping calm the somewhat panicking property and stock markets.

The stock market was slightly unnerved earlier this week after the Industrial Bank reportedly decided to suspend some loans to fend off property bubble risks.

Chinese shares plunged on Monday and Tuesday over fears of a property bubble burst stemming from rumors that Chinese banks had suspended property loans to reduce financial risks.

As real estate companies bounced back on Wednesday, the benchmark Shanghai Composite Index rose 0.35 percent, or 7.03 points, to finish at 2,041.25. The Shenzhen Component Index gained 0.21 percent, or 15.67 points, to close at 7,319.61.

On Wednesday, a number of Chinese banks confirmed to Xinhua that they had not changed their property loan policies.

A chief of the Bank of Communications' public relations department, who refused to give his name, said the bank's headquarters had issued no directives telling its branches to suspend property loans.

China's top four banks, the Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China (ABC) and China Construction Bank, all confirmed to Xinhua that there had been no change in their property loan policies.

China's banking sector had not tightened credit policy towards real estate companies, said a research paper by the China International Capital Corporation this week.

It is merely a single business department of an individual bank, which is the Industrial Bank, that had restricted some financing products for the real estate sector, it added.

However, a senior employee in ABC's public relations department said although the bank had not suspended property loans, they noticed the risks in the real restate market, and would adopt differentiated policies in accordance with changes in the market.

The newly-found uncertainty came amid signs of a gradually cooling property sector, as official data on Monday showed home prices dropped last month in more Chinese cities.

Of 70 major Chinese cities, 62 saw monthly rises in new home prices, while prices in six cities declined in January. New home prices fell in only two cities in December.

The average monthly increase for new homes slowed slightly to 0.49 percent last month from 0.51 percent in December, with the average in the four first-tier cities -- Beijing, Shanghai, Guangzhou and Shenzhen -- slowing 0.1 percentage points from December, the data showed.

Prices of existing homes also cooled, declining in 13 cities, as opposed to only five in December.

However, bank executives and economists played down the risks. "Property loans are relatively good loans as housing is reliable collateral," an executive of a big Chinese bank said.

"In addition, the banks are in control of interest rates so property loans can produce high returns, especially concerning property in big cities where risks are controllable," he added.

Lian Ping, chief economist of the Bank of Communications, said systemic risks are not likely even though the property market suffers problems, because the proportion of property loans in the banks' total loans is not high.