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China Stocks Rebound From Lowest Since Rout as Smallcaps Rally

  • ChiNext surges after 28 firms pledge to stabilize market
  • Shanghai Composite briefly falls below lowest level since rout
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China Chaos: What Will Calm the Markets?

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Chinese stocks rebounded from the brink of a bear market in a late-day swing as the lowest valuations in four months lured bargain hunters and a group of smaller companies pledged to support their share prices.

The Shanghai Composite Index gained 2 percent to 3,007.65 at the close, reversing a loss of as much as 2.8 percent and sending a gauge of volatility to the highest levels since September. The ChiNext small-caps index surged the most in two months after 28 listed companies vowed to take action to stabilize the market, with some pledging not to sell shares over the next six months. State funds may have entered to buy stocks after the Shanghai index fell below the lowest levels reached in last year’s rout, according to Galaxy Securities Co.