[SHANGHAI] China's benchmark stock index closed up 2.41 per cent on Monday in a day of rollercoaster trading after authorities unveiled an unprecedented package of measures designed to shore up a plunging market.
The Shanghai Composite Index jumped 88.99 points to 3,775.91 on turnover of 943.4 billion yuan ($154.2 billion) on Monday. It surged 7.82 per cent at the open but fell as much as 0.92 per cent during the day.
The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 2.70 per cent, or 56.63 points, to 2,041.85 on turnover of 609.1 billion yuan. It fell as much as 5.53 per cent, wiping out an earlier gain of 6.55 per cent.
The Chinese market - which is partially insulated from the global financial system - was not focused on Greece, which sent most Asian markets down on Monday after Greek voters rejected more austerity demands from creditors.
China's latest measures came after other actions last week - including an interest rate cut, relaxed rules on margin trading, and proposals to let the state social security funds invest in equities - failed to arrest steep declines.
Despite the gain for the day, analysts question whether levels are sustainable following a huge run-up in Chinese shares over the past year.
Until last month mainland Chinese markets were among the world's best recent performers, with Shanghai rising more than 150 per cent in a spectacular borrowing-fuelled bull run in the 12 months to its top on June 12.
But the market had plunged almost 30 per cent over the three weeks to Friday, prompting the government to intervene over the weekend on concerns the slump could threaten the broader economy.
On Sunday, the government said the central bank would provide funds through the state-backed China Securities Finance Co to "protect the stability of the securities market", according to exchange watchdog the China Securities Regulatory Commission (CSRC). It gave no amount but state media said the funds would be used to "revive" the bourse.
The CSRC also said on Sunday that there would be no initial public offerings (IPOs) "in the near future", according to a separate statement. State media said 28 companies whose flotations have already been approved would postpone them.
Chinese regulations mean new share issues offer near-guaranteed profits and so drain funds from the rest of the market, hurting prices and sentiment.
"This type of state-led market-saving has never been seen before, even when the market crashed during the last financial crisis," Zheshang Securities analyst Zhang Yanbing told AFP, referring to the global economic meltdown of 2008.