By Dong Zhixin (chinadaily.com.cn)
Updated: 2007-10-08 16:08

China's main stock index started the fourth quarter with a new record high on Monday, as investors snapped up financial shares after the week-long National Day holiday.

The benchmark Shanghai Composite Index opened 131.01 points higher at 5,683.31 points before breaking though the 5,700 mark to hit as high as 5,729.96. It eased a bit to close at 5,692.76, an increase of 112.79 percent since the end of last year.

The Shenzhen Composite Index rose 0.57 percent to end the session at 1,541.35 points, while the CSI 300 Index added 1.30 points to 5,653.13.

The Chinese market was closed during the National Day holiday.

The surge was largely driven by financial and property shares. The Industrial and Commercial Bank of China was the single largest driver, contributing 48.17 points to the Shanghai index with a 9.98 percent jump to close at 7.27 yuan per share.

China Life followed with a 8.65 percent rise to 67.81 yuan, while Bank of China gained 6.24 percent to 6.30 yuan.

China Minsheng Banking Corp. increased 3.10 percent to 16.30 yuan after it announced plans to pay US$317 million for a 9.9 percent stake in UCBH Holdings Inc., the Nasdaq-listed parent company of US-based United Commercial Bank. The transaction, subject to regulatory approval from both countries, marks the Chinese mainland's first strategic investment in an American bank.

In the real estate sector, China Vanke and China Merchants Property Development soared to their daily limits of 10 percent, followed by a 9.03 percent jump in shares of COFCO Property Group.

However, the surge was leveled off as more than half of the stocks declined, with airline shares leading the drop.

Air China plunged 6.74 percent to 22.0 yuan, while China Southern Airlines tumbled 6.81 percent to 22.31 yuan

There were no change in the fundamentals in the airline industry, but investors continued the selling spree sparked by an announcement of Air China and Cathay Pacific to cancel their bids to buy China Eastern Airlines.