Chinese shares surged more than 7 percent on Wednesday, making their largest one-day gain in four months, with all but one company rising amid speculation that the government would act to support the market and boost the economy.

The benchmark Shanghai Composite Index jumped 7.63 percent, or 178.81 points, to close at 2,523.28. The Shenzhen Component surged 7.13 percent, or 567.58 points, to close at 8,531.15.

Aggregate turnover jumped to 65.7 billion yuan (9.59 billion U.S. dollars), more than double Tuesday's 30.5 billion yuan.

Gains outnumbered losses by 825-1 in Shanghai and 676-0 in Shenzhen.

Analysts attributed the gains to a turnaround in investor confidence.

According to analysts, investors took heart from a supportive statement by the China Insurance Regulatory Commission, which said several hours after the market close on Tuesday that it would always firmly support the development of the country's share market. However, it didn't elaborate on how it would do so.

There was also market talk that the government would allow brokers to underwrite secondary offering of shares that have been "locked-up," although again, no details were available. However, such issues would be a boost to securities firms.

Shares slid more than 5 percent on Monday to a 20-month low.

(Xinhua News Agency August 20, 2008)