Market experts attribute the return of retail investors to the largest one-day gain of 4.3 percent registered on Thursday at the Shanghai Stock Exchange as the Index closed at 2,899.46.

Reckoned from January, the gains made by the Shanghai Composite Index is now 37 percent, beating fellow Asian giant India as the biggest gainer for 2014 among the major global indices.

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As individual investors returned in numbers, newly opened stock trading accounts reached 370,071 last week, another record-breaker from April 2011 levels, reports the Wall Street Journal.

With more ordinary Chinese investing in stocks, retail investors' share of trading volume rose to 80 percent. Coupled with a decision by the Bank of China in late November to reduce the key lending rate, overall trading volumes also broke records on the first week of December.

Caroline Maurer, portfolio manager at Henderson Global Investors, was not surprised with the 4.3 percent increase on Thursday, saying the rally was long due. She attributes the bullish market to Beijing's more proactive approach in stabilizing the Chinese economy, while putting in place reforms that boosted the confidence of local investors in the bourses.

Ken Peng, a strategist at Citigroup, also pointed to the interest rate cut, the link of the Shanghai Stock Exchange with the Hong Kong Stock Exchange and clearer solution for different financing channels as the boosters to retail investors' confidence in the stock market.

Experts forecast more records to be broken in the coming days as China's stock market begins "an unprecedented period of sustainable growth," said Shanghai Simpleway Asset Management General Manager Jiang Gui.

West China Securities analyst Wei Wei agreed, telling Bloomberg, "The market is in the stage of a bull run ... Sentiment is quite strong and the market should rise further."

Morgan Stanley strategist Jonathan Garner even foresees a possible ultra bull rally wherein share prices would double in 18 months, but Ken finds the recent hike in stock value as irrational and not a reflection of China's economic fundamentals.

Tagsstock market, Shanghai Stock Exchange