SHANGHAI stocks rallied to a new high today backed by strong growth in the airliner and steel sectors. China Eastern Airlines led the growth after signing a stake sale plan.

The Shanghai Composite Index, which tracks both yuan-denominated A shares and hard-currency B shares, gained 1.96 percent, or 102.23 points, to close at 5,321.06.

The Shenzhen Composite Index, which covers the smaller mainland stock market, rose 2.06 percent, or 30.06 points, to 1,487.89.

China Eastern Airlines, the third biggest carrier in China, rose by the daily limit of 10 percent to close at 10.56 yuan (US$1.38) per share after it announced a deal yesterday to sell a combined 24 percent stake to Singapore Airlines and Temasek Holdings, Singapore's government investment arm.

Its shares had been suspended from trading since May 22 after reports about the deal surfaced.

China Eastern's growth also spurred other airliners.

China Southern Airlines jumped 10 percent to 22.87 yuan and Air China rose 9.95 percent to 21.11 yuan.

Shanghai Airlines rose 9.98 percent to 15.32 yuan and Hainan Airlines rose 9.98 percent to 11.57 yuan.

Shanghai-based Baoshan Iron & Steel Co rose 5.46 percent to 19.50 yuan and Xinjiang Bayi Iron & Steel Group rose 9.99 to 14.42 yuan.

Tangshan Iron & Steel Co jumped 9.57 percent to 22.90 yuan and Angang Steel Co rose 7.18 percent to 36.87 yuan.

China Petroleum & Chemical Corp rose 2.16 percent to 16.08 yuan after announcing plans to spend 62.7 billion yuan to build a natural gas pipeline linking western China and Shanghai.

Citic Securities Co rose 2.26 percent to 91 yuan. China's biggest publicly traded brokerage will trade 333.73 million new shares tomorrow.