Investors monitor the movement of stock prices at a brokerage firm in Guangzhou, South China's Guangdong Province May 9, 2007. [newsphoto]

Chinese stocks posted new highs on Monday as the total number of share trading accounts in the country topped 100 million.

The benchmark Shanghai Composite Index rose 2.21 percent to close at 4,272.11 points, extending this year's gains to 59.7 percent. The Shanghai and Shenzhen 300 Index of major companies broke the 4,000-point mark for the first time, closing at 4,072.58, an increase of nearly 100 percent since the start of this year.

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The rise was partly driven by the flood of fresh capital brought about by new investors. The number of accounts, including A-, B-shares and closed-end funds in the Shanghai and Shenzhen stock exchanges reached 99.82 million by May 25, according to statistics from the China Securities Depository and Clearing Corporation.

With more than 300,000 new accounts opened each day in the past month, the total number of accounts is certain to surpass 100 million on Monday.

Financial shares were strong, with Ping An Insurance of China being the biggest gainer, rising 4.13 percent to end at 64.48 yuan per share. China Life, the country's top life insurer, increased three percent to 40.2 yuan.

The Industrial and Commercial Bank of China inched up 0.73 percent to 5.53 yuan, while the Bank of China went up 0.69 percent to close at 5.84 yuan.

In the electricity sector, Huadian Power International, Sichuan Xichang Electric Power, and Leaguer Stock Co all jumped their daily limits of 10 percent.

Real estate stocks also staged strong performances. Financial Street Holding Co. soared its 10 percent daily limit to 28.01 yuan, followed by China Merchants Property Development Co., which surged 7.59 percent to 46.8 yuan.

Trading was heavy, with the volume hitting 258.11 billion yuan in Shanghai and turnover reaching 130.77 billion yuan in Shenzhen.

The flood of novice investors into the runaway market, which several heavyweights have said is definitely a bubble, has worried regulators. The China Securities Regulatory Commission have asked investors to sign a declaration that they knew of the risks when opening an account with a brokerage firm.

Former chairman of US Federal Reserve Alan Greenspan said last week China's stock market was clearly unsustainable and he expected a dramatic contraction at some point.

Greenspan's remarks followed warnings from Asia's richest man, Li Ka-shing who said China's stock valuations "must be a bubble" and prices are likely to decline.