China shares end up 0.5 pct on economy optimism

SHANGHAI, Nov 4 (Reuters) - China's key stock index rose 0.46 percent to end at a nearly three-month closing high on Wednesday, led by metal shares, continuing a rally this week fuelled by optimism over the economic recovery and sharply improving corporate earnings prospects.

The Shanghai Composite Index .SSEC finished at 3,128.537 points, its highest close since Aug. 13, having risen more than 4 percent so far this week.

Gaining Shanghai A shares outnumbered losers by 557 to 311 as turnover remained active at 164 billion yuan ($24 billion), although that was down from Tuesday's 170 billion yuan.

In the latest evidence of China's recovering economy, the World Bank on Wednesday raised its forecasts for Chinese growth this year and projected a slightly faster pace of expansion in 2010, but it said Beijing did not need to embark on major policy tightening at this stage. [ID:nPEK132888]

Shandong Gold (600547.SS) outperformed the market, ending up 2.11 percent at 69.79 yuan, after gold prices XAU= hit a record $1,088 per ounce following news that India's central bank bought 200 tonnes of the metal from the International Monetary Fund. Rival Zijin Mining (601899.SS) rose 1.5 percent to 9.49 yuan. ($1 = 6.83 yuan) (Reporting by Lu Jianxin and Edmund Klamann)