A Chinese investor smiles and talks to another as they look at prices of shares (red for price rising and green for price falling) at a stock brokerage house in Fuyang city, East China's Anhui province, April 13, 2015. [Photo/IC]

Chinese stocks rallied on Monday, with the benchmark Shanghai index up 2.2 percent, led by railway infrastructure, banking and healthcare sectors.

The Shanghai Composite Index stood on its highest level in seven years, closing at 4,121.72 points, while the Shenzhen Component Index climbed nearly 1 percent to 14,149.5 points.

China Merchants Bank surged by the daily limit of 10 percent, after the bank announced that it will raise as much as 6 billion yuan ($967 million) in a private placement to its employees. China Construction Bank and Industrial and Commercial Bank of China added 7.1 and 4.3 percent respectively.

The country's top high-speed train manufacturers CNR Corp and CSR Corp jumped by the daily limit on Monday. According to an earlier announcement, the two companies will merge as world's biggest train maker. Companies on the railway industrial chain such as Taiyuan Heavy Industry Co, China Railway Group and Beijing Dinghan Technology advanced 10 percent.

Healthcare stocks also led the gain on Monday. Eight companies including medial manufacturer Shinwa and diagnosis service provider Di An Diagnosis jumped by the daily limit.

Environmental protection stocks remained bullish after Zhang Yong, deputy head of the National Development and Reform Commission, vowed that energy conservation and emission reduction are this year's top priorities.

The CSI 300 index advanced 1.8 percent to 4,421.07 points.