Chinese shares gained ground on Wednesday following a record high for the yuan, which broke through 7.50 to the dollar.

The Shanghai Composite Index, which covers A and B shares, edged up 1.21 percent to close at 5,843.11 points and the Shenzhen Component Index on the smaller market ended at 18,761.90 points, up 0.81 percent.

On the two markets, 410 stocks gained and more than 1,100 others suffered losses.

The Industrial and Commercial Bank of China, the country's largest commercial lender, continued to rise 1.15 percent to 7.95 yuan and China Merchants Bank, labeled the best bank in China by financial magazine Euromoney, climbed a further three percent to 42.96 yuan.

Meanwhile, both the Bank of China and China CITIC Bank dipped more than one percent.

Vanke, the leading real estate developer, which rose 4.1 percent on Tuesday, continued to grow 1.55 percent to 33.51 yuan while Baosteel, the nation's biggest steel producer, declined 0.11 percent to 18.63 yuan.

The yuan reached a new central parity rate of 7.4938 yuan to US$1 on Wednesday.

Tan Yaling, an expert with the Bank of China, said a weakening dollar and calls from the United States and Europe that China should allow the currency to appreciate more quickly were "short-term reasons" contributing to the recent rise in value.

"Speculation ignited by rising expectations of a stronger yuan also led to the continuous appreciation of the Chinese currency," she said.

The accumulative appreciation since July 21, 2005, when China abolished yuan's peg to the dollar, has exceeded eight percent.

(Xinhua News Agency October 25, 2007)