Update | China stocks climb the most in three weeks on state intervention

Chinese stocks climbed the most in three weeks on Wednesday, recovering from previous steep losses after Beijing launched fresh rescue measures to prop up share prices following the worst market rout at the start of a new year.

However, Hong Kong and other Asian shares remained significantly weaker, as worries persist on extended volatility from Chinese stocks, with North Korea’s nuclear test further jangling nerves in the region.

Mainland China’s benchmark Shanghai Composite Index advanced 2.3 per cent to close at 3,361.84, snapping a three-day losing streak. The index plunged 7 per cent on Monday, marking its worst start to a new year in history, as fears about a deteriorating Chinese economy and the yuan’s fall to its lowest in nearly five years spurred a sell-off.

Meantime, the large-cap CSI300 rose 1.8 per cent to end at 3,539.81. The Shenzhen Composite Index settled 2.6 per cent higher at 2,133.96, and the Nasdaq-style ChiNext Index finished up 2.1 per cent at 2,468.37.

The Caixin China services Purchasing Managers’ Index (PMI) dropped to 50.2 in December, compared with 51.2 in November, according to Caixin Media and Markit.

The gains in stocks came after a series of rescue measures by the Chinese government to calm jittery investors following Monday’s turmoil. Beijing has ordered a group of state-backed funds -- also known as the “national team” -- to buy blue-chip equities and prop up share prices, various media reports said on Tuesday.