People stand in front of a display showing share prices at a stock brokerage in Zhongshan, South China's Guangdong Province on Monday. Photo: CFP

China's benchmark stock index hit its highest level in nearly seven years on Monday, led by a surge in railway and infrastructure construction shares.

The Shanghai Composite Index rose 1.95 percent to close at 3,687.73 points on Monday, having reached a seven-year high of 3,688.25 points during afternoon trading.

The index stretched its rise to a ninth consecutive day on Monday, and has gained by around 14 percent since the beginning of this year.

The Shenzhen Component Index, the country's second-largest bourse, also surged by 1.88 percent on Monday to close at 12,780.32 points, just short of a five-year high.

Combined turnover on the two bourses once again passed 1 trillion yuan ($163 billion) on Monday, with 161 stocks soaring by the daily limit of 10 percent, according to the Xinhua News Agency.

Shares in Shanghai-listed China Railway Construction Corporation surged by 10 percent to 17.57 yuan on Monday, and other rail companies such as China Railway Group also reported a sharp increase in prices.

"The upbeat market was mainly driven by the performance of railway and infrastructure construction firms, which could benefit from China's 'One Belt and One Road' initiative," Cai Junyi, chief analyst at Shanghai Securities, told the Global Times on Monday.

Internet stocks were also among the big winners, after calls by the country's top leadership for development of emerging industries, Cai noted.

Ramped-up economic reforms, including State-owned enterprise reform and the "One Belt and One Road" initiative, were discussed during China's annual legislative and political consultative sessions, which ran from March 3 to 15. Cai said the performance of the stock market has been boosted by the reforms discussed at the two sessions.

The recent surge of the stock market reflects investors' confidence in China's economic growth and reform program, Deng Ge, spokesman for the China Securities Regulatory Commission (CSRC), said at a press conference on Friday.

"The surge is inevitable and rational," Deng said.

According to data from the CSRC, the number of newly opened stock accounts from March 9 to Thursday reached a daily average of 177,000, compared with 129,000 in December.

"Signs from Friday's press conference indicate that Chinese authorities will continue policy easing to boost the sound development of the stock market," Cai said.

The central bank is expected to further ease its monetary policy later this year, which could release more liquidity into the market, Cao Xiao, a professor of finance at Shanghai University of Finance and Economics, told the Global Times on Monday.

Following an interest rate cut in February, the central bank may further cut interest rates and banks' reserve requirement ratio in the coming months, according to Cao.

Deng from the CSRC noted that sound development of the stock market would help boost direct financing and accelerate China's economic restructuring.

Indirect financing, including raising money via loans from commercial banks, is now the main financing channel for Chinese enterprises, Cao said, adding that a successful stock market would benefit China's firms by boosting direct financing.

But Cao also said it is still difficult for China's small and medium-sized companies to raise money via the stock market as it is hard for them to get listed.

In addition, experts have warned of potential risks in the market, with recent data showing that the economy is still facing strong downward pressure.

Data released by the National Bureau of Statistics on March 11 showed that industrial value-added output in China rose by 6.8 percent year-on-year in the first two months, down 1.1 percentage points from the rise in December.