China stocks bounce back but analysts cautious

China stocks rebounded sharply on Wednesday from earlier slumps, with more than 300 A shares surging over 9 percent.

The benchmark Shanghai Composite Index advanced 2.49 percent to end at 2,958.28 points, while the smaller Shenzhen Component Index jumped 4.37 percent to 10,652.9 points.

The Nasdaq-style ChiNext Composite Index, meanwhile, soared 5.52 percent to 2,269.17 points and the STAR 50 Index closed 4.42 percent higher at 906.43 points.

Total turnover on the two major bourses reached 917.7 billion yuan (US$140 billion), expanding 78.9 billion yuan from the previous trading day.

Of note, approximately 4,000 companies listed on the A-share market posted gains, among which 314 rocketed by over 9 percent. Around 700 A shares, however, dropped in the session.

Among sectors, lithium battery-related shares led the gains on Wednesday, pulling up the ChiNext index.

Listed on the ChiNext board, Mianyang Fulin Precision Co surged by the 20 percent daily cap, and Hunan Zhongke Electric Co and SuZhou TA&A Ultra Clean Technology Co both gained more than 15 percent.

Industries, including base metals, semi-conductor, and aerospace and military defense, were also among the biggest gainers.

Exchange-rate wobbles, however, triggered a sharp drop in the textile and apparel sector. The real estate shares also performed weakly.

Despite Wednesday's strong rebound, analysts of securities companies, including Guotai Junan Securities, Central China Securities and Haitong Securities, were all cautious about the market's short-term prospects, expecting to see more swings in A shares before supportive policies and economic recovery bolster the struggling bourses.