The Year of the Dog began with a loud bark on the Shanghai and Shenzhen stock exchanges yesterday as shares rallied on the first day of trading after the long Lunar New Year holiday. The Shanghai Composite Index, which tracks A and B shares, rose 2.35 per cent to close at 1,287.63 points, its highest level for 10 months, while Shenzhen's Composite Index gained 2.86 per cent to 315.9 points. Analysts attributed the surge to reports that the government would allow trading on credit, an expectation that A and B shares would be merged and an eagerness to catch up on the gains made by mainland companies listed in Hong Kong where the market was closed for only two days over the holiday. Zhang Qi, an analyst at Haitong Securities, said the best performers in Shanghai and Shenzhen were non-ferrous metals and property stocks. Jiangxi Copper and Yunnan Copper both rose 10 per cent after prices hit record highs on the London Metal Exchange last week. Shares in gold-mining companies also performed well. 'Shares went up across the board, continuing the momentum since December,' Mr Zhang said. 'On the policy front, the main factor was the possibility of credit trading.' Mainland media yesterday reported that the relevant departments of the State Council were considering proposals to introduce trading on credit to improve conditions for qualified investors, which traders took as a sign more funds would enter the market. Mr Zhang said the market was likely to climb until the National People's Congress meeting next month but upward potential was limited to about 1,300 points. Mainland stocks climbed 3.24 per cent in Hong Kong yesterday, lifting the H-share index to 6,403.51 points. The Hang Seng Index rose 0.76 per cent to 15,548.06 points.