The Shanghai Composite Index, which covers yuan-denominated A shares and foreign-currency B shares, surged 1.3 percent, to 1,274.81 .

The Shenzhen Composite Index, which tracks the smaller market, jumped 1.1 percent, to 310.21. Both measures advanced by the most since February 21.

There was strong institutional demand for Sinopec, Asia's top refiner by capacity, as speculation intensified China may quicken the reform of oil pricing, traders said.

Orient Securities said the stock's 9.5 percent decline last week was excessive relative to its earnings outlook.

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"The oil refiner sector still looks healthy as there are bullish expectations, such as the price increases in refined oil products," said Zhang Xuejun at Guotai Junan Allianz Fund Management in Shanghai.

Sinopec, rose 3.6 percent, to 5.12 yuan (HK$4.93). Last week the shares had the biggest weekly drop since they began trading in Shanghai in 2001.

"The recent decline has provided investors with a good opportunity to increase holdings of Sinopec," wrote analyst Wang Jing at Orient Securities in a note dated Friday.

The official Shanghai Securities News Wednesday cited Jiang Weixin, Vice Minister of the National Development and Reform Commission, as saying the government is considering raising domestic energy prices to better reflect the scarcity and value of energy resources. NDRC is China's top economic planning agency.

Other oil refiners also rose. Sinopec Yizheng Chemical Fibre, China's largest chemical fiber maker, added 3.1 percent, to 4.01 yuan. The shares fell 7.3 percent last week. Shijiazhuang Refining-Chemical, a unit of Sinopec, gained or 2.9 percent, to 3.85 yuan.

Sinopec's rally lent weight to other blue chips, with CITIC Securities up 2.4 percent at 6.3 yuan and China Vanke adding 2.2 percent to end at 5.47 yuan.

Aluminum companies recorded big gains on speculation Aluminum Corp of China, or Chalco, may buy out its China-listed units and aluminum firms at a premium, traders said.

Yunnan Aluminium soared 8.3 percent to 5.37 yuan while Jiaozuo Wanfang Aluminum Manufacturing advanced 3.9 percent to 4.86 yuan.

Lanzhou Aluminium gained 3.7 percent to 6.16 yuan.

Some analysts, however, cautioned against buying into the rally.

"Risks in nonferrous counters are rising. Most of them have jumped a lot over past months on strong demand for the metals," said analyst Chen Huiqin at Huatai Securities. BLOOMBERG, DOW JONES NEWSWIRES