hinese shares rebounded Friday as investors hunted bargains and power companies rose after a government capital injection into one electricity supplier.
The benchmark Shanghai Composite Index rose 1.4 percent, or 26.68 points, to close at 1904.86. The Shenzhen Composite Index for China's smaller second market rose 2.2 percent to 585.85.
Investors are looking forward to the inauguration of U.S. President-elect Barack Obama, who has proposed a massive stimulus package for the U.S. economy.
"With Obama's stimulus plan, everyone's expecting the American economy to take off and trigger a comeback for China's exports and then the economy," said Huang Xiangbin, an analyst for Cinda Securities in Beijing.
Power companies surged after the government gave 30 million yuan ($4.4 million) to Guangxi Guiguan Electric Power Co. in southern China to compensate for damage to two of its generating stations in last year's devastating earthquake in Sichuan province.
Datang International Power Generation Ltd., Guiguan's parent, soared 8 percent to 7.29 yuan; Chongqing Jiulong Electric Power Ltd. advanced the daily maximum of 10 percent to 3.55 yuan. Shanghai Electric Power Ltd. surged 5.6 percent to 3.21 yuan.
Banks also rose. Industrial & Commercial Bank of China Ltd., China's biggest commercial lender, gained 1.1 percent to 3.58 yuan. Bank of China Ltd. climbed 1.4 percent to 2.98 yuan, while China Construction Bank, Ltd. recovered 1.1 percent to 3.76 yuan.
A rebound in commodity prices boosted interest in nonferrous metals producers.
Jiangxi Copper Ltd., the country's second-biggest metal producer, rose 4.6 percent to 11.93 yuan, while Aluminum Corp. of China, also known as Chalco, posted a 2.3 percent gain to 6.52 yuan.
In currency markets, China's yuan strengthened to 6.8345 to the U.S. dollar, up from Thursday's close of 6.83611.