The Shanghai Stock Exchange (SSE) said Friday afternoon that the investment strategy department of Everbright Securities Company, Ltd. had encountered a problem in its arbitrage system while operating with its own funds during the morning trade at the bourse.

The statement, posted on SSE's microblog at Weibo.com, was issued after a surprising surge during the morning session, led by the financial sector and oil giants.

Trading of Everbright shares was suspended on Friday afternoon.

SSE said in another statement that all Friday trading will go into the normal settlement and entrustment process.

There is speculation that Everbright may have applied to cancel all morning trading.

The benchmark Shanghai Composite Index rose 3.19 percent in morning trading to 2,148.39 points, a two-month high. The Shenzhen Component Index rose 2.91 percent in the morning session.

Industrial and Commercial Bank of China (ICBC), the country's largest lender, and PetroChina, the nation's biggest oil and gas producer, both rose briefly to near the daily increase limit of 10 percent before pulling back.