Shanghai's key stock index rose for the first time in six days thanks to a broad-based rally.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, jumped 2.53 percent, or 92.71 points, to 3,761.61.
Gainers in the Shanghai market outnumbered losers 772 to 66 while 14 were unchanged.
The Shenzhen Composite Index, which covers the mainland's smaller stock market, was up 3.49 percent, or 37.76 points, to 1,120.04.
Property developers were among the gainers today on expectations a strengthening yuan will boost overseas demand for assets priced in the local currency.
The yuan today climbed to the highest since the end of a dollar peg in 2005 on signs China is stepping up efforts to curb inflation after the central bank ordered banks to set aside more reserves for the second time this year.
China has allowed a 3.2 percent gain in the currency this year, almost half the advance of 2007, as policy makers battle to reduce inflation from an 11-year high. Lenders must place a record 15.5 percent of deposits with the central bank starting from March 25, up from 15 percent, the People's Bank of China said in a statement yesterday.
The yuan rose as much as 0.24 percent to 7.0648 against the US dollar today in Shanghai, the biggest gain this month, according to the China Foreign Exchange Trade System. The currency has risen 17 percent since a decade-old peg to the dollar was scrapped in July 2005.
China has been allowing a faster appreciation in the yuan to prevent the inflow of speculative money, which has flooded its banking system with cash to push up inflation.
Premier Wen Jiabao yesterday pledged to take "forceful'' steps to damp inflation.