China share prices gained Friday with the key Shanghai Composite Index closing at its highest level in more than 16 months, as metal shares continued to rise on strong international metal prices. The yuan fell against the U.S. dollar.

The benchmark Shanghai Composite Index edged up 0.2 percent to 1,342.97, its highest closing level since Nov. 26, 2004, when it settled at 1,356.73. The Shenzhen Composite Index rose 0.6 percent to 339.49.

"Despite the strong performance of metal shares, the possibility of a technical correction in the general market is increasing, as the heavy trading volume in the past several sessions reflects divergent market views," said Simon Wang, a strategist at Xiangcai Securities.

Metal shares rose sharply after fund buying pushed copper and zinc prices to fresh record highs in the London Metal Exchange on Thursday.

Hunan Zhuye Torch Metals hit the 10 percent upside limit at 6.04 yuan. Yunnan Copper rose 2.0 percent to 7.07 and Shenzhen Zhongjin Linnan Nonferrous Metal gained 2.4 percent to 15.19.

But large-capitalized stocks were hit by profit-taking. CITIC Securities fell 0.7 percent to 8.09, China Yangtze Power shed 1.2 percent to 6.45 and China Merchants Bank lost 2.4 percent to 6.65.

Worries that regulators might allow initial public offerings to resume after a year's suspension for shareholding reforms are still weighing on sentiment, analysts said.

"The market will experience more profit-taking next week, as people are worried IPOs may resume in May and pressure liquidity," said Zhou Ji, an analyst at Haitong Securities.

In currency dealings, the U.S. dollar closed at 8.0110 on the automatic price-matching system. It ended at 8.0080 on Thursday after the yuan hit 8.0050, its highest level against the dollar since a revaluation in July.