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 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.

Shandong Gold outperformed the market, ending up 2.11 percent at 69.79 yuan, after gold prices 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 rose 1.5 percent to 9.49 yuan.

($1 = 6.83 yuan)

(Reporting by Lu Jianxin and Edmund Klamann)

((jianxin.lu@thomsonreuters.com; (8621) 6104-1792)) Hong Kong report Taiwan report Shanghai indices Shenzhen indices Hong Kong indices H-share index Red share index SPEED GUIDES RELATED NEWS AND OTHER TOPICS China news All equity news Greater China news Chinese summary Hong Kong news Chinese hot stocks Taiwan news China IPOs Chinese diary Hong Kong IPOs Press digests Keywords: MARKETS CHINA STOCKS

(Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.