Shanghai shares scaled new heights yesterday, boosted by investor confidence that higher corporate earnings would support resurgent stock prices. The jump in mainland stocks came as markets across Asia-Pacific recovered from a United States-triggered fall last week. The Shanghai Composite Index jumped 95.41 points or 2.2 per cent from Friday's record close to 4,440.77. The Shenzhen Composite Index climbed 28.48 points or 2.29 per cent to 1,274.93, shy of its record high of 1,275.26 set on June 19. 'Strong corporate earnings and yuan appreciation should lend support to A shares in the long term,' said Jing Ulrich, JP Morgan's China equities chairman. Total turnover on the Shanghai and Shenzhen exchanges rose 12 per cent to 242 billion yuan, signalling investors' buying interest was increasing, analysts said. 'The bull run seems unstoppable,' said Qiu Yanying, an analyst at TX Investment Consulting. 'A lot of funds made a U-turn to the market, betting on a further gain.' Mr Qiu said the central bank's move to raise banks' reserve ratio by 0.5 percentage point after yesterday's market close would have a minimal impact on stocks. Mrs Ulrich agrees. Analysts say regulators will likely accelerate the pace of initial public offerings to dampen the market. On Friday, mainland investors dismissed the worries over the US subprime loan crisis that drove down indices across the globe. Yesterday they recovered, with the Korea Composite Index rising 1.25 per cent, India's Sensex climbing 0.17 per cent and Australia's S&P/ASX 200 moving up 0.43 per cent. Japan's Topix rose 0.35 per cent. The Morgan Stanley Capital International Asia Pacific Index, a regional benchmark, was up 0.4 per cent. 'After the huge sell-off we've got a technical rebound,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities. 'The regional markets are hoping for a rebound in the US when trading begins there because the gross domestic product data was better than expected on Friday, but the momentum of regional markets is not strong.' GDP in the US rose 3.4 per cent, according to government data released after Asian markets closed on Friday. Inflation hit a four-year low. Mr Tang said regional investors would be watching the value of the yen. The Japanese currency was at 118.97 against the US dollar when trading in London began yesterday, near a three-month high. Deutsche Bank said the yen could fall to 116 against the dollar by September. 'If it falls below 118 investors will worry about carry trade positions and some funds will leave the regional market,' Mr Tang said. The yen carry trade and Japanese private capital outflows are estimated at US$1 trillion, according to a report by Fan Cheuk-wan, the head of Asian equity research at Credit Suisse's private banking division.