Chinese shares boosted by Wen's comments

Shanghai shares on Monday reached their highest since the Olympics, leading the region higher as optimistic comments by Wen Jiabao, China's premier, helped momentum in the market.

The Shanghai Composite Index gained 2.1 per cent to 2,557.456, the highest since August 8, led by the mainland's larger companies, including banks.

Speaking at the Boao forum over the weekend Mr Wen said that the country's stimulus package was paying off and that the economy was turning a corner.

China Merchants Bank gained 2.2 per cent to Rmb5.10, while Shanghai Pudong Development Bank gained 2.3 per cent to Rmb22.54. Sinopec rose 4.2 per cent to Rmb9.97 and Cnooc rose 2.2 per cent to Rmb17.45.

Airlines rose on local reports that ticket prices will increase under a new pricing scheme. China Southern gained 5.9 per cent to Rmb6.33. In Hong Kong, China Southern rallied 14 per cent to HK$2.03 and China Eastern gained 16.9 per cent to HK$1.45.

In Hong Kong, other shares benefited from the mainland optimism, and the Hang Seng closed 1 per cent higher at 15,750.91. Ping An Insurance gained 3.3 per cent to HK$52.70 and Bank of China rose 5 per cent to HK$2.95.