Shares in Shanghai recovered yesterday, led by banks after the yuan finished at a new high on Wednesday.

The benchmark Shanghai Composite Index, which tracks both yuan-denominated A shares and hard currency B chips, gained 58.45 points, or 1.14 percent, to finish at 5,167.88. The A shares rose 1.13 percent to 5,426.4 while the B chips surged 2.65 percent to 322.23.

"The call by the country's top leadership to push for a healthy development of the financial sector is interpreted by many investors as a positive signal, which boosted their confidence," said Luo Yanping, an analyst with Shanghai Shiji Investment Consulting Co.

President Hu Jintao has called for an acceleration in the banking reform to push forward sustainable and healthy development of the country's financial sector, the China Securities Journal reported yesterday.

Hu made the call on Wednesday when presiding over a meeting of the Political Bureau of the Communist Party of China Central Committee.

More than 700 stocks advanced while 122 fell yesterday in the Shanghai market. But the value of transactions shrank by nearly seven billion yuan to 155 billion yuan.

The rebound yesterday was also attributed to the yuan's new high of 7.5487 to the US dollar, helping boost bank shares on speculation their assets will rise in value and propel the overall market.

The Industrial and Commercial Bank of China, the nation's biggest lender, rose 1.34 percent to end at 6.8 yuan. The Bank of Communications, 18.6 percent held by HSBC Holdings Plc, edged up 0.54 percent to 13.14 yuan.

Shares of non-ferrous metals firms plunged yesterday. Aluminum Corporation of China, which had gained for almost a month, tumbled 8.08 percent to 51.53 yuan. Baotou Aluminum Co plummeted 9.83 percent to 61.27 yuan.