The yuan rose to its highest level against the U.S. dollar since the Chinese currency was revalued in July, tracking the greenback's weakness in other markets.

The benchmark Shanghai Composite Index gained 0.8 percent at 1,340.16. It was the index's highest close since Nov. 30, 2004, when it ended at 1,340.77. The Shenzhen Composite Index rose 1.0 percent to 335.58.

The dollar closed at 8.0073 yuan on the automatic price matching system, dipping as low as 8.0066 during the day. On Tuesday it closed at 8.0171.

On the over-the-counter market the dollar was at 8.0080 at 0730 GMT.

"Recent rises in the yuan triggered active buying in property and retail shares, and boosted overall sentiment," said Zhang Yuheng, an analyst at CSC International Holdings.

Analysts expect more money to flow into China's securities and property markets as investors bet on further yuan rises.

China Vanke, the country's largest listed property developer by market capitalization, rose 2.7 percent to 6.98 yuan.

Major retailers with many outlets rose on expectations they will benefit from a rise in property prices.

Shanghai Friendship Group surged 1.7 percent to 8.44, Hualian Supermarket jumped 5.8 percent to 6.391 and Beijing Hualian Hypermarket gained 2.0 percent to 13.03.

Lanzhou Aluminium rose 4.5 percent to 6.68 and Shandong Aluminium Industry surged 7.8 percent to 16.49 on speculation their parent company, Aluminum Corp. of China, may take them private soon.