BEIJING, July 28  -- Chinese shares continued to rise on Monday to their highest level of the year, after the banking regulator approved the creation of three private banks.

The benchmark Shanghai Composite Index went up 2.41 percent to finish at 2,177.95 points. The Shenzhen Component Index moved up 3.04 percent to close at 7,808.66 points.

Total turnover on the two bourses rose to 333.79 billion yuan (54.72 billion U.S. dollars) from 220.17 billion yuan the previous trading day.

The three banks approved on Friday by the banking regulator are Webank by Internet giant Tencent, one in the eastern city of Wenzhou and one in the northern municipality of Tianjin.

Unsurprisingly, the financial sector led Monday's rise, up 4.34 percent from the previous trading day. Huaxia Bank, a medium-size bank, rose 7.36 percent to 8.75 yuan per share. Minsheng Bank rose 6.09 percent to 6.62 yuan per share.

The rally continues a trend that began last Tuesday, amid positive government policies on new energy vehicles, an encouraging purchasing managers' index reading from HSBC, and the State Council support for small firms, agriculture, services and the energy-saving sector.

Those stimuli offset the negative effect of new share subscriptions and restored market confidence.