SHANGHAI (Dow Jones) -- China's shares ended sharply higher Monday, led by banks due to Agricultural Bank of China's strength after it said it fully exercised the overallotment option for the Shanghai portion of its initial public offering, and shipping and energy firms on expectations of strong earnings.

The benchmark Shanghai Composite Index, which tracks both A and B shares, rose 2.1% to 2661.71. The Shenzhen Composite Index rose 2.3% to 1128.02.
Analysts said the Shanghai index will likely consolidate around 2650 this week as investors digest recent strong corporate earnings reports amid a slowdown in domestic economic growth.
Banks were among the biggest gainers despite concerns earlier in the day that AgBank could fall after it said Sunday it fully exercised the overallotment option for the Shanghai portion of its IPO, meaning it has raised more money in an IPO than any other company in history. AgBank rose 0.7% to CNY2.71.
The lender said it raised an additional CNY9.11 billion from Shanghai portion of its IPO by selling another 3.4 billion shares at CNY2.68 each in a greenshoe, or overallotment option. By exercising the overallotment option, AgBank brings the total amount raised from its dual listing in Hong Kong and Shanghai to $22.1 billion, eclipsing the $21.93 billion raised by Industrial & Commercial Bank of China Ltd. in 2006.
Wu Yonggang, a banking sector analyst at Guotai Junan Securities, said AgBank should be able to digest the dilution effect of the greenshoe option.
China Merchants Bank rose 1.9% to CNY13.98, while Bank of Communications ended up 1.6% at CNY6.32.
China Everbright Bank will make its stock market debut in Shanghai on Wednesday, and analysts said they expect it to perform well. China shipping firms with container and bulk businesses rose significantly in modest trade after the Baltic Dry Index advanced 1.3% to 2,468 Friday. The index has rebounded strongly after falling as low as 1,700 on July 15. China Cosco Holdings rose by the 10.0% daily trading limit to CNY10.31, and China Shipping Development gained 9.0% to CNY10.22. China Shipping Container Lines ended up 9.9% at CNY4.32.
“These gains are partly due to investors' expectations of strong earnings results and also because the stocks are tracking the BDI's rebound in the past month,” said Gong Junjie, an analyst at Guodu Securities.
Cosco and China Shipping Container Lines are expected to disclose first-half results on Aug 25.
Energy firms rose after the National Energy Administration said Saturday that China's July power consumption expanded 14% from a year earlier. China Shenhua Energy gained 5.4% to CNY23.93, and China Coal Energy ended up 2.9% at CNY9.88.
The August 2010 index futures contract, the most actively traded of the four index futures contracts traded in China, ended 2.7% higher at 2927.6.
The futures are referenced to the CSI-300, an index of 300 Shanghai- and Shenzhen-listed yuan-denominated A shares. The CSI-300 ended 2.3% higher at 2922.08.