Chinese stocks closed higher Monday, with the benchmark Shanghai Composite Index up 0.54 percent at 3,171.24 points.

The smaller Shenzhen index closed 0.41 percent higher at 10,331.79 points.

Turnover on the two exchanges stood at 415.4 billion yuan (about 59.77billion U.S. dollars), down from 454.7 billion yuan the previous trading day.

The ChiNext Index, which tracks China's NASDAQ-style enterprises, lost 0.17 percent to close at 1,961.62 points.

Aviation and military stocks led Monday's rally following media reports that state-owned China South Industries Group Corporation, the country's leading military industry company, had completed initial plans for mixed-ownership reform.

The sub-index of the aviation and military sector rose 1.83 percent on Monday, with nine stocks in the sector surging by the daily limit of 10 percent.

Shares related to mixed-ownership reform of state-owned enterprises also witnessed significant gains. China CSSC Holdings, a leading ship maker, increased 5.02 percent to 30.36 yuan.

Bucking the trend, wine makers and agriculture-related stocks fell on Monday. Kweichow Maotai, China's leading liquor maker, dropped 0.64 percent to 348.51 yuan.

The Chinese currency Monday saw the biggest daily percentage fall against the U.S. dollar since June 2016, with the central parity rate of the yuan down 594 basis points to 6.9262 against the greenback, according to the China Foreign Exchange Trade System.