China's stocks ended higher Tuesday after data from the HSBC showed that China's manufacturing activity increased in July.

The benchmark Shanghai Composite Index at one point tumbled to 2,131.01 points, the lowest level in nearly three years, during morning trading but surged in the afternoon to end the day at 2,146.59, up 0.24 percent, or 5.19 points.

The Shenzhen Component Index gained 0.84 percent, or 76.75 points, to close at 9,262.77.

Preliminary figures from HSBC showed that China's purchasing managers' index (PMI), which gauges activity in the manufacturing sector, rose to 49.5 in July from 48.2 in June.

In addition, the index measuring manufacturing output also rebounded, reaching a nine-month high of 51.2 percent in July, compared with 49.3 in June, according to the bank giant.

A reading above 50 suggests expansion, while a reading below 50 indicates contraction.

The data gave a lift to the equity market, with gainers outnumbering losers 697 to 224 in Shanghai and 1,105 to 338 in Shenzhen.

Combined turnover on the two bourses reached 94.81 billion yuan (15.05 billion U.S. dollars).

Property shares led the gains after the government of east China's city of Nanjing on Monday announced a string of measures to stimulate domestic consumption, including easing purchase restrictions for qualified non-residents.

Although the government said the move was aimed at attracting people to work in the city, many saw it as a sign of loosening in the property market, which has warmed up in recent months.

Poly Estate, the nation's second-largest property developer, moved up 2.14 percent to end the day at 11.44 yuan per share, while China Merchants Property rose 3.37 percent to close at 23.59 yuan.

Banking shares extended sluggish performances on Tuesday. The Industrial and Commercial Bank of China, the country's largest lender, lost 1.08 percent to end at 3.68 yuan. China Merchants Bank shed 1.03 percent to 9.59 yuan per share.

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