China shares leapt 3.43 percent on Monday, scaling a two-month peak and ending up for the fifth straight day as investors sought bargains among steel firms on fresh signs Beijing was supporting the market via reforms.
Investor confidence was boosted also by news that former Chinese president Jiang Zemin had handed the top job in the military to Communist Party chief Hu Jintao, completing a transition of leadership to a younger generation.
The benchmark Shanghai composite index, grouping foreign-currency B shares and local-currency A shares, closed at 1,463.221 points after hitting an intraday high of 1,463.793 points - a level not seen since July 19.
The index has now put on 16 percent since last Monday's close, when speculation first began swirling of impending measures to aid a market that is down 18 percent from early April - hit by efforts to curb credit and slow the economy.
"An abundance of money has flown into the market on strong signs of government policy support," said Song Huaisong at Xingye Securities.
"The smooth transition of leadership helped stabilise market sentiment, which had turned bullish on persistent hopes of imminent supporting measures," he added.
In the latest initiatives, Beijing has begun deliberating a slew of market reforms, such as attracting more foreign cash, aimed at propping up the equity markets, the official China Securities Journal reported on Monday.
Index heavyweight Wuhan Steel Processing Co, China's third-largest steel maker, jumped 4 percent to 7.78 yuan.
Baosteel Iron and Steel Co Ltd, China's top steel maker, was among the day's most active counters. Its A shares, open to select foreign investors, rose 3.3 percent to 6.58 yuan.
Steel counters had borne the blunt of a recent market slump after Beijing named it as one of several overheated sectors.
But analysts said the market was now under heavy profit-taking pressure after a week-long climb, with near-term resistance seen at 1,480 points.
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