Chinese shares rebounded from Thursday's downturn, hitting a new high on Friday, boosted by strong blue chips and USD-denominated shares.

The benchmark Shanghai Composite Index, which tracks both yuan-denominated A shares and hard-currency B shares closed at 4,179.78 points on Friday, up 28.65 points from the previous close.

The smaller Shenzhen Component Index closed at 12,681.45 points, up 166.30 points.

The two bourses recorded a smaller combined turnover of 337.747 billion yuan (US$43.9 billion) against Thursday's 389.397 billion yuan (US$50.6 billion).

Securities firms led Friday's rebound. Property, energy, electric power and defense enterprises were active with several rising to the daily limit of 10 percent. Banks kept restoring vitality.

The USD-denominated B-shares rebounded sharply by 8.75 percent while the Special Treatment (ST) stocks declined drastically with 24 of them dropping to the daily limit of 10 percent.

This showed investors were becoming rational as they were shifting from excessive speculation to moderate investment, said an analyst with Guangfa Securities.

Analysts with Beijing Shoufang Investment Consulting expected the market to remain bullish despite a smaller turnover.

Huiyang Investment warned risks for new shareholders and suggested investors buy banks shares which had been affected by the yuan appreciation.

On Friday, the Hushen 300 Index reflecting the whole fluctuation of China's Shanghai and Shenzhen stock exchanges closed at 3,985.25 points, up 65.50 points from the previous close.

(Xinhua News Agency May 26, 2007)