Turnover on the Shanghai index hit a record 104.86bn yuan

The Shanghai Composite index, rose 3.6% to close at 2,933.19 while the smaller Shenzhen Composite Index surged 4.2% to 700.20 - both record levels.

Retail shares lifted on strong sales expectations for the Chinese New Year, which is in mid-February.

Bus firm Beijing Bashi shares jumped 10%, the daily limit, to 9.96 yuan and Daqin Railway surged 10% to 10.07 yuan.

Investors were heartened by senior regulators showing no signs that they intend to cool the market's recent rally, when they met over the weekend.

Despite the market showing relatively more volatility than usual in recent weeks, traders say they expect gains to continue thanks to strong liquidity as investors are keen to buy into China's strong economic growth.

Meanwhile in Japan, the Nikkei average also closed at its highest level in nine months amid optimism about upcoming corporate earnings and the weak yen lifting export-related stocks.