An influx of investor cash after China's week-long May Day holiday helped push share prices further up when the markets reopened on Tuesday.

Analysts said the confidence was spurred by gains on overseas markets during the seven-day shutdown of the Shanghai and Shenzhen markets.

The benchmark Shanghai Composite Index closed up 2.83 percent on Tuesday at 3,950.01 points, up 108.74 points from the previous close of 3,841.27, on a turnover of 207.4 billion yuan.

The component index on the smaller Shenzhen Stock Exchange climbed 4.93 percent, or 535.24 points, to close at 11,401.12 points on a turnover of 105.7 billion yuan.

The Hushen 300 Index reflecting movements on both exchanges closed at 3,686.03 points, up 127.32 points from the previous close.

Wan Bing, an analyst with Guangfa Securities, said the rally came after high gains in other equity markets worldwide and more money rushed into the markets after the holiday.

The momentum was also driven by rapid increases in corporate profit reports for the first quarter, said Qiu Yanying, an analyst with Shanghai Tianxiang Investment Consulting.

Property and financial stocks led the rally. Around 10 property stocks rose by the daily limit of 10 percent. China Vanke, the nation's largest publicly traded developer, rose by the daily limit to 19.89 yuan.

The Industrial and Commercial Bank of China added 1.11 percent to 5.48 yuan. Shenzhen Development Bank was up 5.01 percent to 27.25 yuan.

China Petroleum and Chemical Corporation, commonly known as Sinopec, rose 5.3 percent to 11.92 yuan after the international crude oil price declined during the past week.

The central parity rate of China's currency yuan, also known as Renminbi (RMB), hit new high at 7.6951 yuan to one U.S. dollar on Tuesday.

Analysts warned of potential stock bubbles as expectations of RMB appreciation would draw hot money from abroad into China's equity markets.

Source: Xinhua