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BEIJING, Dec. 21 (Xinhua) -- Chinese stocks rallied on Wednesday after slipping for two consecutive days as liquidity concerns fueled by a bond scandal were eased and reforms of state-owned enterprises (SOE) also helped brighten market sentiment.
The benchmark Shanghai Composite Index gained 1.11 percent at 3,137.43 points, and the smaller Shenzhen Component index closed 0.67 percent higher at 10,313.57 points. China's NASDAQ-style ChiNext Index climbed 0.47 percent to close at 1,991.7 points.
Turnover on the two exchanges stood at 429.6 billion yuan (61.9 billion U.S. dollars), rising from 384.4 billion yuan the previous trading day.
Liquidity strain has weighed on the market for days as financial institutions hesitated to lend in the interbank market, discouraged by a bond scandal involving former staff of Sealand Securities. The scandal was reported to have caused losses of up to hundreds of millions of yuan for more than 20 companies.
The brokerage said on Wednesday that it has reached a compromise with those institutions and will take responsibility for faked bond agreements
The settlement improved market sentiment and pushed up bond prices.
Stock indices were also boosted by heavyweights related to SOE reforms. PetroChina Company Ltd. increased 3.93 percent to 7.93 yuan as its parent company approved guidelines to implement mixed-ownership reforms. Leading telecom operator China United Network Communications Ltd., which will reportedly introduce private investors, went up 3.8 percent to 7.37 yuan.
Sectors including shipmaking, aircraft manufacturing and transport also led the rises.
