The Chinese equity markets bucked the global trend and reversed early losses of 1 percent to gain more than 1.3 percent toward closing, as investors speculate that the country will soon selectively ease its current monetary tightening policies.
The benchmark Shanghai Composite Index slid 1.3 percent at opening and cut the losses to 1 percent for the morning break. Speculations that China's policymakers will soon partly loosen the current tightening measures boosted the market sentiment when trading resumed in the afternoon, lifting the index by 34.09 points, or 1.38 percent, to close at 2,504.11.
The Shenzhen Component Index opened 1.44 percent lower and widened its losses to 1.5 percent for the morning close. Hopes of policy easing also fueled a broad rally in the afternoon and sent the index up by 1.34 percent to close at 10,581.75.
Investors returned to the market to buy risky assets, boosting the combined turnover to 201.43 billion yuan (31.82 billion U.S. dollars), compared with Tuesday's 167.1 billion yuan.
Rising shares outnumbered decliners 813 to 109 in Shanghai, and 1,237 to 91 in Shenzhen, with share prices of 116 companies remaining unchanged in both markets.
Market sentiment greatly improved after the Greek government's abrupt call for a referendum on the European rescue fund, as the China Securities Journal said Wednesday new loans made by the four largest state-owned banks reached 140 billion yuan in October, offering the latest signs of a soon-to-be selective easing of tightening policies.
Media and entertainment companies led the gains with the sub-index jumping 7.52 percent as policymakers look to the cultural industry as a new source of economic growth. Jiangxi Publishing Group and six other companies capped Wednesday's gains at the 10-percent rise-or-decline limit.
The software sector also rose sharply amid reports that the State Council will soon unveil details of tax breaks for the industry. Share prices of Inspur Group and 14 other companies in the sector jumped by 10 percent.
