Chinese shares climbed to a new high at the end of the first day's trading of the Year of Pig, as the benchmark Shanghai Composite Index, a major index of Chinese shares, closed at 3,040.60 points on Monday, up 42.13 points.

The component index of the smaller Shenzhen Stock Exchange rose 16.42 points to end at 8,588.69 points. Turnover on the two bourses totaled 138.56 billion yuan (17.32 billion U.S. dollars).

Nearly 1,300 stocks of the 1,400 stocks on the two markets reported gains, with more than 120 of them hitting the daily raise limit of 10 percent.

However, banking shares fell after the People's Bank of China, the country's central bank, raised the required reserve ratio for financial institutions engaging in deposit business by 0.5 percentage points to 10 percent on Sunday.

Excluding the shares of the Bank of China, the whole banking sector reported loses, which also affected the securities and insurance sectors.

"The increase in the required reserve ratio will not deal a blow to the bull market," said securities analyst Qiu Yanying.

Zhao Jianxing, of China Merchants Securities, said that the announcements of high profits by most listed companies in 2006 would push the equity market to a new high at the end of the first quarter.

Source: Xinhua