The energy company's soaring valuation underlines the frenzy among Chinese investors for new stock despite concerns that a bubble has formed in the country's closed equity markets.

In scenes reminiscent of the dotcom boom, heavy demand saw the shares race up from the flotation price of 16.7 yuan (107p) to 43.96 yuan by the close, giving the group a market capitalisation of about $1 trillion (£480bn). At that level it accounts for almost a quarter of the entire Shanghai A-share market.

As well as leapfrogging ExxonMobil - whose $480bn market capitalisation had previously made it the world's biggest company by market value - PetroChina found itself worth nearly twice as much as Royal Dutch Shell and BP combined.

China now has five of the world's 10 most valuable companies. China Mobile, Industrial and Commercial Bank of China, China Life Insurance and Sinopec join PetroChina in the top ranks.

Analysts said that PetroChina, which is already listed in Hong Kong, was benefiting from soaring oil and gas prices but cautioned that the stock was also fuelled by speculators seeking a quick profit.

One factor behind PetroChina's huge market valuation is that only 2% of its shares were floated yesterday. China's growing army of small investors are still restricted from trading shares on overseas markets, and this has helped the benchmark Shanghai index increase almost sixfold in the past two years.

Several analysts warn that China's stock-market boom is a bubble that will soon burst. Former Federal Reserve chairman Alan Greenspan warned in May that China's stock market was due a "dramatic correction". Since then the market has gained another 35%.

Legendary investor Warren Buffett has also expressed concern about China, warning that its markets were "too hot".

Mr Buffett has been a significant investor in PetroChina, but will not profit from yesterday's flotation. In October he revealed he had sold his entire stake in the company.

Despite the warnings from Buffet and others that prices are excessive, the Chinese authorities have restricted themselves to watching with a wary eye.

At the weekend, prime minister Wen Jiabao said the government would take measures to prevent bubbles forming.

The China Securities Regulatory Commission ordered securities funds to avoid "blind expansion" or speculative activities.

But amid a widespread belief that the government will not allow a major decline in stock values before the 2008 Olympics, the appetite of investors for new shares shows little sign of abating.

Vital Measures

The market value of PetroChina, the world's biggest company$1 trillion

Market value of ExxonMobil, the world's biggest firm before yesterday$480bn

Spurt in Shanghai market since Alan Greenspan predicted a correction35%