Stocks rebound on back of more liquidity injection by PBOC

An investor watches an electronic board showing stock information at a brokerage office in Fuyang city,?Anhui province,?Feb 2, 2016.[Photo/IC]

Stocks rallied on Tuesday amid light trading, as the central bank pumped more liquidity into the financial system for the upcoming Chinese New Year holiday.

The benchmark Shanghai Composite Index closed up 2.3 percent to 2,749.57, reversing Monday's loss, while the Shenzhen Component Index climbed 3.1 percent to 9,610.93.

Technology and medical companies led the gain on Tuesday, as Inspur Software Co, Beijing Philisense Technology Co and Hangzhou Shunwang Technology Co jumped by the daily limit of 10 percent. Top Choice Medical Investment Co and Zhejiang Dian Diagnostics rose 8.4 and 4.4 percent respectively.

The People's Bank of China injected 100 billion yuan ($15.2 billion) cash via reverse repurchase agreements at open markets on Tuesday, according to its public announcement, to tide over shortages which often accompany Chinese New Year holiday.

Despite the small rebound, China's stock market remains one of the world's worst performers so far this year. The Shanghai gauge has plunged 22.3 percent amid concerns on the ongoing economic slowdown and the renminbi's weakening.

The purchasing managers' index (PMI) hit a three-year low to 49.4 in January from 49.7 in December, weaker than expected, according to data released by the National Bureau of Statistics on Monday.

The CSI 300 Index which tracks some of the largest-cap stocks in Shanghai and Shenzhen edged up 2.1 percent to 2,961.33.