China stocks rebound (Third Lead)

Chinese shares rose on Wednesday as regulators promised ongoing support for the market following two days of sharp drops.

The benchmark Shanghai composite index climbed 3.44 percent to close at 3,789.17 points. The smaller Shenzhen Component Index went up 4.11 percent to close at 12,823.07 points, Xinhua reported.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 4.33 percent to end at 2,693.87 points.

The China Securities Regulatory Commission said on Tuesday that it is investigating possible irregularities in Monday's huge sell-off that sent the benchmark index into its worst spiral in eight years.

After the massive sell-off since mid-June, the Chinese government has unveiled a slew of measures to prop up the market, including reducing the number of new shares to avoid a shares glut, a police crackdown on short-selling and a six-month ban on big shareholders selling stocks.

Before the market took a downturn on June 12, the Shanghai composite had risen by 152 percent since July 2014 and nearly 60 percent since the beginning of the year, galloping far ahead of economic fundamentals during the period.

This week's equity sell-off should have only a limited impact on China's economy and monetary policy easing will continue as the economic recovery is slow, said a Nomura research note.