The Shanghai Composite Index gained 2.0 percent, posting a weekly increase of 4.4 percent, and standing above 4,000 points, which was seen by many as a strong resistance level.
Both indexes reach their highest levels since March 2008.
China's annual consumer inflation rate (CPI) in March stayed flat at 1.4 percent, data showed early in the day, while producer prices (PPI) contracted 4.6 percent, highlighting the pressures facing Chinese companies as the economy slows.
ANZ said in a note "the soft inflation data in March means the central bank needs to further loosen monetary policies."
China's foreign currency denominated B-share market surged, taking cues from recent feverishness in the Hong Kong market.
Among the most active stocks in Shanghai were Bank of China , up 1.8 percent to 4.57 yuan; Agricultural Bank of China, up 1.1 percent to 3.81 yuan and Everbright Bank, up 3.7 percent to 5.34 yuan.
In Shenzhen, BOE Technology, up 3.4 percent to 4.24 yuan; TCL Corp, up 0.7 percent to 6.20 yuan and Vanke, down 2.2 percent to 14.32 yuan were among the most actively traded. Total volume of A shares traded in Shanghai was 48.1 billion shares, while Shenzhen volume was 29.3 billion shares.