Chinese stocks recovered today after plunging earlier in the day.
The Shanghai Composite Index, which had tumbled as much as 7.25 per cent in the morning, was down only 1.25 per cent at 3,624.507 points in the early afternoon.
Traders said rumours spread through the market that authorities were preparing to issue a public statement pledging to maintain positive policies toward stocks.
There was no immediate comment from securities regulators or other government agencies which determine policies affecting the market.
READ MORE
The market has tumbled since last Wednesday, when the Ministry of Finance hiked the stock trading tax to deflate a speculative bubble.