Chinese stocks broke new ground on Monday amid continued market optimism that is defying global slumps, with heavyweight blue chips leading the way.

The benchmark Shanghai Composite Index rose 95.47 points, or 2.20 percent, to close at 4,440.77 points on a daily transaction volume of 155.538 billion yuan (US$ 20.5 billion).

The Component Index on the Shenzhen Stock Exchange moved up 446.76 points, or 3.06 percent, to end the day at 15,060.86 points with a turnover of 85.93 billion yuan.

However, B-shares on the Shenzhen bourse edged down 48.93 points, or 0.80 percent, to close at 6,074.69 points.

Five blue chips contributed significantly to the upward movement of the Shanghai Composite Index.

China Life, the country's biggest life insurer, rose 2.79 percent to 14.35 yuan. Datang International Generation, a leading power supplier, went up 9.98 percent to 20.72 yuan. Industrial and Commercial Bank of China, up 1.06 percent to 5.73 yuan and Baosteel, the country's largest steel maker, up 6.98 percent to 13.49 yuan.

Observers said the continued optimism was based on impressive interim corporate earnings. It will continue into next month if the economic performance of listed companies keeps improving, they believe.

There were 735 gains and 99 losses on the Shanghai bourse and 468 gains and 122 losses on the Shenzhen stock exchange.

The Hushen 300 Index, which tracks 300 companies on the Shanghai and Shenzhen stock exchanges, closed at 4,410.30 points, up 103.16 points, or 2.39 percent.

(Xinhua News Agency July 31 2007)