China's shares ended at their highest level in more than three months on Thursday after materials firms rallied on news that Morgan Stanley had agreed to invest in the country's top cement maker, Anhui Conch. The benchmark Shanghai composite index gained 1.1 percent to finish at 1,169.862 points, the highest close since September 21, when it ended at 1,187.988 points.
The key index has now gained 6.4 percent since the beginning of December, buoyed by technical buying and efforts by institutional players to dress up their portfolios before the year's end.
"The market is poised to end up on Friday, the final trading day of the year, as the gains today were accompanied by increased volumes, indicating more investors were buying," said Yu Haitao at First Capital Securities.
Anhui Conch Cement Co Ltd gained 3.6 percent to close at 9.90 yuan after the dual-listed firm said Morgan Stanley and the World Bank's International Finance Corp had agreed to take a combined 14.3 percent stake. "It's no wonder that shares of Chinese material sector firms are getting a boost," said Peng Yong, analyst with ABN Amro Xiangcai Fund Management Co.
Baotou Steel Co Ltd ended up 0.5 percent at 2.24 yuan, extending Wednesday's gains after the world's largest steel maker, Mittal Steel Co, confirmed reports it was in talks with the listed firm's parent on acquiring a stake in the company.
Despite recent gains, China's benchmark stock index is still down 7.6 percent from the beginning of the year, hit by factors such as Beijing's economy-cooling steps and an unpopular programme to float $250 billion of non-traded state holdings in listed companies.