Stocks back up after falling to five-year low

An investor tracks share movements at a brokerage in Hangzhou, Zhejiang province, Dec 8, 2014. [Photo/Asianewsphoto by Long Wei]

Chinese shares rose on Wednesday, halting the benchmark index's biggest plunge in five years, as the country's slowing inflation raises probability for more monetary easing.

The Shanghai Composite Index rallied 2.96 percent to 2940.88 after sliding 5.4 percent on Tuesday, while Shenzhen Component Index closed at 10545.51 on Wednesday, up 4.24 percent.

China's consumer price index (CPI), the main gauge of inflation, rose by 1.4 percent year-on-year in November, the modest increase in five years, official data showed on Wednesday.

About 111 shares soared by daily limit of 10 percent, including sewage processing company Capital Environment Protection, Origin Water and property developer Shirong Zhaoye, Tianjin Jinbin Development and COFCO Property.

Financial sector continued to adjust, as Huatai Securities, New China Life and China Life edged down 3.77, 2.48 and 1.63 percent.

The CSI 300 Index advanced 3.7 percent to 3221.93 on Wednesday.

Volatility in stocks is increasing, as the Shanghai index swung nearly 9 percent on Tuesday when the value of equities changing hands on mainland exchanges reached a record high of 1.24 trillion yuan ($200 billion). The overall turnover on Wednesday reached 911.5 billion yuan.