China shares close up more than 3%

Chinese shares rallied more than three percent on Monday, with Shanghai ending above the symbolic 4,800 level, led by heavyweight blue-chips and supported by ample market liquidity, dealers said. The benchmark Shanghai Composite Index surged 3.35 percent, or 156.20 points, to 4,813.80 on turnover of 1.1 trillion yuan ($179.8 billion). It was the highest close since January 21, 2008. The Shenzhen Composite Index, which tracks stocks on China’s second exchange, rose 1.61 percent, or 44.15 points, to 2,785.07 on turnover of 912.1 billion yuan. The Hong Kong stock market was closed for a public holiday. "Investors chased heavyweight blue-chips as they underperformed earlier compared to small company stocks," Zhang Qi, an analyst with Haitong Securities, told AFP. Dai Ming, Shanghai-based money manager at Hengsheng Asset Management, told Bloomberg News: “We’re seeing funds rotate to underperforming big caps. “They may do better than small caps going forward. Small caps have been coming under lots of pressure from regulatory scrutiny given the huge gains they’ve made,” he said. Small company shares made strong gains last week and China’s market regulator on Friday said it will punish 12 cases of market manipulation, including companies with “sky-high” stock prices. Companies launched 20 initial public offerings last week, with funds from unsuccessful subscriptions returning to the market this week. "Funds unlocked from last week’s new share subscriptions also helped the market to rally today," Zhang said. Shenzhen-listed Guosen Securities surged 9.94 percent to 34.61 yuan while Citic Securities rose 3.38 percent to 34.24 yuan in Shanghai. In Shanghai, China Southern Airlines jumped 8.04 percent to 10.75 yuan while China Eastern Airlines added 6.60 percent to 8.88 yuan.