The Shanghai Composite gained more than 2 percent Monday, pushing the benchmark above the 3,000-point barrier for the first time in almost four years. Financial companies, aviation firms and shipbuilders led the rally.

The shares peaked in the afternoon at 3,001.48, marking the first time since April 25, 2011 that the index broke through the psychological 3,000-point barrier.

Like Us on Facebook

Chinese shares, which had been bearish for years, have risen in the past several months, reports China state news agency Xinhua. The rally was spurred by last month's interest rate cut, which increased liquidity.

Since the Chinese central bank lowered interest rates on November 21, the Shanghai index responded strongly with a 17 percent rise.

Many institutions expect a cut in the reserve requirement ratio soon for some banks, which is expected to release more funds into the equity market, reports Xinhua. Analysts view the rally as the beginning of a bullish cycle.

The financial sub-index surged more than 5 percent, with five securities firm shares gaining the daily 10 percent limit, including Citic Securities and Hongyuan Securities.

Shares related to China's aviation and space industry rose across the board, after China launched the CBERS-4 satellite, jointly developed with Brazil, on Sunday by a Long March-4B rocket, the 200th launch of Long March rocket family, reports Xinhua. Five companies, including Hongdu Aviation Industry Group and AVIC Aircraft Co. Ltd, jumped by the daily 10 percent limit.

Breaking through the 3,000-point mark could be a psychological boost to Chinese investors who have endured a slew of bearish data in recent months that suggest a slowdown in the economy.

Last month, investment bank and analyst group UBS forecast the China's economy to slow down over the next two years as a result of the country's real estate downturn.

"We forecast China's GDP growth to slow to 6.8 percent in 2015 and 6.5 percent in 2016," said Wang Tao, UBS chief China economist in the report. "This slowdown is mainly driven by the ongoing property downturn."

TagsShanghai Index Above 3000 Points for First Time Since 2011, Financial companies, aviation firms, shipbuilders, April 25 2011, Citic Securities, Hongyuan Securities, Hongdu Aviation Industry Group, AVIC Aircraft