China's stocks surged in the morning session Friday on booming holiday retail sales and higher gold prices.

The benchmark Shanghai Composite Index gained 3.28 percent to finish the morning session at 2,742.81 points after reaching the psychologically significant 2,700-point level.

The Shenzhen Component Index opened 1.10 percent higher at 11,594.92 before jumping 4.07 percent to end the morning break at 11,935.61.

Kweichow Moutai, the maker of baijiu liquor, gained 3.89 percent after the Ministry of Commerce (MOC) said Thursday that the country's retail and catering sales jumped 18.7 percent during the seven-day National Day holiday starting Oct. 1.

Shares of gold producers made the biggest gains, as prices of the metal rose to a record high in Shanghai as investors sought an alternative investment to the U.S. dollar which slid to an eight-month low against the euro on Thursday.

Zijin Mining Group, China's largest gold producer, surged by its 10 percent daily trading limit to end at eight yuan (1.2 U.S. dollars) per share.

Shandong Gold Mining, a big producer of gold based in east China's Shandong Province, rose nine percent to 60.90 yuan in Shanghai.