Chinese shares rebounded strongly on Tuesday, closing at their highest in more than 7 years following fluctuations and a record high transaction value on Monday.

The key Shanghai Composite Index rose 1.82 percent, or 76.55 points, to finish at 4,293.62 points, the highest level since March 7, 2008 when it closed at 4,300.52 points.

The smaller Shenzhen Component Index jumped 4.09 percent, or 567.40 points, to close at 14,439.00 points. The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, soared 5.82 percent, or 141.24 points, to end at 2,566.09 points.

Combined turnover for the two bourses shrank to 1.44 trillion yuan (234.6 billion U.S. dollars), down from Monday's record high of 1.8 trillion yuan.

During Tuesday's trading, gainers outnumbered losers by 867 to 68 in Shanghai and by 1,350 to 41 in Shenzhen.

Shares of the wine , information security, household appliances and medical equipment industries were among the largest gainers in the day. While stocks of shipbuilding and transportation and logistics were among the biggest losers.

All 29 wine makers rose on Tuesday with the sub-index tracking wine companies jumping 6.8 percent. Leading liquor maker Kweichow Moutai and Yanghe Distillery jumped by the daily 10 percent limit.

Shares of China's top bullet train makers CSR Corp. and CNR Corp., which had been soaring since March 17 and saw their prices more than double in one month, tumbled by the daily limit of 10 percent.

On Monday, Chinese stocks experienced a roller coaster-like trading day as shares were bullish in the morning trading session and bearish in the afternoon session, after a reserve requirement ratio (RRR) cut and new short-selling measures.

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