Chinese shares rose 2.61 percent on Friday as investors bet on continued gains in the near term, snapping up blue chips such as top steel maker Baosteel.
The benchmark Shanghai composite index closed at 1,659.545 points, having risen 19 percent in the past month alone. It briefly hit two-year highs on Monday as bourses considered relaxing trading restrictions.
"Steel stocks have been strong today, as have shares in alternative energy and airlines," said analyst Chen Jinren with Huatai Securities. "We expect the upward trend to continue."
China's top steelmaker, Baoshan Iron and Steel, gained 4.75 percent to 4.85 yuan despite global iron ore price negotiations pointing towards a possible 19-percent price hike.
Top iron ore producer CVRD said on Thursday it had ended negotiations with South Korean steelmaker POSCO Co Ltd to raise the price of ore 19 percent, but analysts said the price hike was already discounted in Baosteel's share price.
Smaller rival Baotou Iron and Steel Co Ltd soared 6.06 percent to 2.45 yuan, while Maanshan Iron and Steel Co Ltd rose 3.48 percent to 2.97 yuan. Among the most actively traded stocks in the morning was top Shanghai-listed lender Merchants Bank Co, which gained 3.22 percent to 7.38 yuan.
Minsheng Banking Corp, China's first private lender, rose 1.13 percent to 4.49 yuan.
The benchmark index has jumped 43 percent since the end of last year, buoyed mainly by Beijing's market-friendly steps, including encouraging greater participation by mutual funds.