Its A shares opened at 3.99 yuan, compared with the offer price of 3.08 yuan. They hit 4.05 yuan in the opening minutes before slipping back at midday to 3.79 yuan, where they closed.

The composite index ended at 1,718.56, up 2.2 per cent, after climbing above 1,750 intraday for the first time since April 9, 2004.

The index has gained more than 45 per cent this year, partly because the Bank of China IPO is seen as heralding a succession of Shanghai listings by large mainland companies, notably banks, that have already been well received in Hong Kong.

Brokers see the stock trading in the 3.8 to 4.0 yuan range in the coming days, not getting too far out of step with the value of its Hong Kong-traded H shares, which had closed at HK$3.55 yesterday, down 3.4 per cent.

The bank raised US$11.2 billion in Hong Kong, where its shares were listed on June 1, in the world's fourth-largest IPO.

Tian Wenbin, head of research at Hong Kong and Macau Consultancy, said the Shanghai closing price was more reasonable than many people expected, given the enthusiasm for the listing.

'If it had reached 4.5 yuan, then the index would have fallen in the days ahead,' Mr Tian said.

He said there should be a close correlation between the A and H-share movements in future, although the A shares would probably be worth less because of the uncertainty raised by the arrival on the open market of formerly non-tradeable state-owned shares.

For mainland securities regulators, much is riding on the IPO. They want the bank to be the first of many blue chips to list in Shanghai, to make the market deeper, less unstable and more reassuring to investors, both foreign and domestic. They also want to change the mind-set of those blue chips which automatically favour a listing in Hong Kong over a domestic one.

China Construction Bank, Industrial and Commercial Bank of China, Air China, Shanghai Automotive and Industry Corp, China Mobile and Aluminium Corp of China are considering Shanghai listings.