China's shares ended higher yesterday as investors looking for bargains in recently battered technology stocks helped the market rebound after hitting four-year lows earlier this week, brokers said.

The benchmark Shanghai composite index, grouping hard-currency B shares for foreigners and yuan-denominated A shares, jumped 2.81 per cent to 1,376.506 points.

About 50 stocks surged to their daily limits of 10 per cent after technology counters recovered from recent steep falls, brokers said.

SVA Electron Co Ltd, one of China's biggest DVD (digital video disc) player makers, saw its A shares rise 10 per cent to 8.65 yuan (US$1.05) after the firm said it had started mass production of China's next-generation EVD (enhanced versatile disc) players.

Software company Newsky Software also rose its 10 per cent limit to 6.66 yuan (80 US cents), while Harbin High-Tech traded limit-up at 5.14 yuan (62 US cents).

"Low-priced tech stocks soared, boosting market sentiment," said analyst Zhu Chaoan of Dapeng Securities.

"Bargain-hunting was the major driving force behind their gains," he added.

But textile counters bucked the uptrend after the United States said yesterday it planned to slap quotas on some Chinese clothing imports.

The Bush administration said it would impose import quotas on Chinese knit fabrics, bras and dressing gowns, a decision analysts said could intensify Sino-US trade disputes.

Fabric maker Worldbest Development fell 2.71 per cent to 6.46 yuan (78 US cents) and textile exporter Nanjing Textiles dropped 1.95 per cent to 9.03 yuan (US$1.09), making them among the top decliners.

But overall market sentiment was little affected as there are only a few textile firms listed on the Shanghai and Shenzhen exchanges.

Textile counters would have limited room to fall after being hit by the recent hike of cotton prices, and a government decision to cut export rebates, analysts said.

Despite yesterday's gains, the Shanghai index is still down 15.6 per cent since mid-April, battered by a bursting IPO (initial public offering) pipeline and a government-ordered tightening of bank loans.

China's yuan ended lower against the US dollar yesterday on late-session dollar buying possibly by the central bank, dealers said.

The one-year non-deliverable forward discount to the spot widened amid a US-China trade spat.

The dollar ended at 8.2770, up from 8.2767 on Wednesday and off an early low of 8.2765. It traded as high as 8.2771 during the session.

Trading volume rose to US$1.06 billion from US$854.9 million on Wednesday, said a trader at a foreign bank in Shanghai.

"Dollar sell orders dominated the market for most of the session, pushing the rate to as low as 8.2765 by late morning," she said.

The central People's Bank of China was suspected of buying dollars late in the session to damp the rise in the yuan, the trader added.

There has been international pressure for the yuan to rise, but the Chinese authorities have said they are resolute in keeping the foreign exchange rate stable.

China's central bank on Tuesday issued US$35 billion in short-term bills, up from last week's US$20 billion, draining funds from the system after the latest statistics highlighted a worrying surge in money supply.

China's decision to let Hong Kong banks conduct yuan-denominated business will not affect the currency's stability, the China Securities Journal said yesterday, quoting central bank Governor Zhou Xiaochuan.

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